Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

ULLAPOOL HARBOUR ORDER CONFIRMATION

Mr. Secretary Rifkind presented a Bill to confirm a Provisional Order under section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to Ullapool Harbour; And the same was read the First time; and ordered to be considered upon Tuesday 29th April and to be printed. [Bill 139.]

Oral Answers to Questions — ENVIRONMENT

Caravan Sites Act 1968

Mr. Colvin: asked the Secretary of State for the Environment when he expects to report on possible amendments to the Caravan Sites Act 1968; and if he will make a statement.

The Parliamentary Under-Secretary of State for the Environment (Mr. Richard Tracey): I announced a review of gipsy sites policy on 13 December and asked for comments and suggestions by the end of March. The 60 or so responses are now being examined and I will announce my conclusions as soon as possible.

Mr. Colvin: When trying to solve the difficult problem of finding accommodation for gipsies, which should take priority, the statutory obligation upon councils to provide sites, or local planning policy, which can also be enshrined in a statutory structure document? If the latter takes priority, will my hon. Friend consider the introduction of a plan for private gipsy sites identified by a strengthened Gypsy Council and owned by the gipsies themselves?

Mr. Tracey: I appreciate my hon. Friend's point. Every individual case must be decided on its merits. It may be necessary, on occasions, to accept a gipsy site in an area where restrictive planning policies apply. However, the arguments in favour must be extremely convincing. Private sites can make an important contribution, and this will be considered further in the review that I have announced.

Mr. Steen: Although my hon. Friend recognises the importance of gipsy sites, will he call for a review of tenting and camping sites? Is he aware that the new directions which have been given by the Ministry of Agriculture, Fisheries and Food and the Department of the

Environment put great pressure on land of historic nature and land of outstanding natural beauty, such as the heritage coastline? Will my hon. Friend initiate a review of 28-day licences, whereby camping is allowed without any planning consent?

Mr. Tracey: The question was confined to gipsy sites, which are one of my responsibilities, but I assure my hon. Friend that my right hon. Friend the Secretary of State for the Environment and my colleagues at the Department will take his points to heart.

Leasehold Reform

Mr. Dubs: asked the Secretary of State for the Environment if he will make a statement on his proposals regarding long leaseholders in blocks of flats.

Dr. Twinn: asked the Secretary of State for the Environment what proposals he has to extend the rights of private sector tenants in mansion-block flats.

The Minister for Housing, Urban Affairs and Construction (Mr. John Patten): My right hon. Friend announced in reply to my hon. Friend the Member for Westminster, North (Mr. Wheeler) on 8 April that the Government have accepted the main thrust of the recommendations of the Nugee committee on the management of privately owned blocks of flats. We propose to go further by giving a right to consultation on the appointment of managing agents and a right in long leasehold blocks to buy out the landlord's interest if he or she persistently fails in his or her duties. We shall introduce legislation as soon as possible.

Mr. Dubs: Is the Minister aware that many leaseholders are desperate for early legislation? Does "as soon as possible" mean in the next Session? Is the Minister still seeking opinions on the structure of the legislation, or has that process finished?

Mr. Patten: I welcome the hon. Gentleman's comment. I cannot, of course, anticipate the contents of the Queen's Speech of the next Session. Obviously we are seeking the earliest possible legislative opportunity. I remember listening with great interest to the hon. Gentleman's speech on his excellent ten-minute Bill. I would welcome any further observations from the hon. Gentleman or any other hon. Members on the contents of our future legislation. I believe that there is cross-party agreement about the need to do something.

Dr. Twinn: I congratulate the Minister and my right hon. Friend on what they have done to extend choice to people who live in flats. Is the Minister aware of the initiative already taken by local Conservative councils which are acting to extend protection to private tenants? Is the Minister aware of the recent agreement made by the Westminster city council with private landlords?

Mr. Patten: Yes. I have just become aware of the agreement between Westminster city council, under its excellent chairman of housing, Councillor Patricia Kirwan, and a good number of private landlords who, on a voluntary code of guidance, anticipate many, if not most, of the things that we hope to indroduce in legislation. I hope that Westminster's lead will be followed by other boroughs and landlords.

Mr. Alan Roberts: Is the Minister aware that many people are at a loss to understand why he has not tabled


amendments or new clauses to the Housing and Planning Bill, to implement the recommendations of the Nugee report? If the Minister really wants to do something for leaseholders in blocks of flats, why does he not accept the Opposition amendment? does he not realise that giving leasehold reform legislation to householders in 1965 helped Labour to a landslide victory in 1966?

Mr. Patten: I had completely forgotten that, if I ever knew it. The hon. Gentleman is aware, from his distinguished service on the Housing and Planning Bill in Committee, how many new clauses and amendments have been tabled. I am loth to table any more, especially on such a complex issue. I am unable to accept the Opposition's amendment because they would want us to change legislation by secondary legislation attached to the Housing and Planning Bill. The issue is far too complex for that. There are many legal ramifications. We must have separate legislation.

Mr. John Fraser: May I remind the Minister that the Opposition have offered to give their full co-operation to any legislation which implements the Nugee committee report? May I also remind him that it has been Labour party policy for many years to introduce leasehold enfranchisement on flats along the lines of the Leasehold Reform Act 1967. The Labour party's view is now endorsed by the Building Societies Association, the National Consumer Protection Council, the Law Commission and many others. Why do the Government not announce that they are in principle in favour of leasehold enfranchisement for flats, as for houses?

Mr. Patten: I welcome the hon. Gentleman's generous comments about the official Opposition's willingness to collaborate and co-operate with us to ensure that the Nugee recommendations are carried forward into law as soon as possible. We are trying to get after bad, delinquent landlords. We do not want to take rights away from good landlords and good managing agents. There are excellent private landlords and managing agents and we do not want the private rented sector to dry up further. That is doing much harm to housing.

Council House Sales

Mr. Thurnham: asked the Secretary of State for the Environment what representations he has received about the provision of an indemnity for council vendors by right to buy purchasers against potential defects in title; and if he will make a statement.

The Parliamentary Under-Secretary of State for the Environment (Sir George Young): My hon. Friend has drawn attention to the position of tenants in his constituency who are denied the right to buy their houses because their landlord does not have good title.
I deplore the failure of Bolton borough council to take steps to perfect its title. The provision of an indemnity would not, however, be a solution in those cases where the landlord cannot sell because he does not have the necessary interest in the property.

Mr. Thurnham: I am grateful to my hon. Friend for that reply. Does he agree that, in many cases, the accepted private sector practice of providing indemnities would be appropriate and helpful?

Sir George Young: Yes, and it would be helpful if Bolton council would offer indemnity when it considers

that it has sufficient interest in a property to be able to sell. It would then be for the purchaser to decide whether he was happy to go ahead and buy on the strength of that indemnity.

Mr. Meadowcroft: Can the problems of defects in title relating to the council's responsibility for defects in the property be covered, as many of my constituents are unable to sell houses which they purchased in good faith because they have discovered defects in property which the council formerly owned?

Sir George Young: That is an ingenious diversion from defect in title to defect in property. The House passed the Housing Defects Act 1984, which was intended to tackle the serious problems experienced by many people who in good faith bought from a public body houses which turned out to have defects. The Government are making good progress with implementing that Act.

Mr. Sackville: Is my hon. Friend aware that many of my constituents in Bolton are unable to buy their homes, although it is clearly the Government's intention that they should be able to do so? How long will councils such as Bolton be allowed to take advantage of the loophole in the right-to-buy legislation? When will the Government introduce legislation necessary to put that right?

Sir George Young: Many of us heard yesterday the renewed apparent commitment of the Labour party to the right to buy. I wonder whether Opposition spokesmen could now have a word with their opposite numbers in Bolton to see whether that council, which is the only one that I know of which denies the right to buy on this rather flimsy pretext, might change its policy. Legislation is complex, but we have not ruled it out.

Rates

Mr. Hickmet: asked the Secretary of State for the Environment what is his assessment of the effect of the imposition by local authorities of high rates to finance expenditure above statutory limits upon the local economy and employment; and what steps his Department has taken and is proposing to take to curb high rate rises.

The Minister for Environment, Countryside and Local Government (Mr. William Waldegrave): I have no doubt that the excessive rates imposed by some councils can have serious consequences for the local economy and for employment opportunities. The rates of the very highest spenders are, and will continue to be, curbed by rate capping. In the longer term, we have published proposal to replace the present rating system in the Green Paper "Paying for Local Government".

Mr. Hickmet: I thank my hon. Friend for his reply. Have not Left-wing authorities such as Liverpool and Lambeth deliberately pursued spending policies that are designed to sabotage local government? Has not that prompted feeble-minded authorities, such as Scunthorpe in my constituency, to overspend to the tune of 46 per cent. and to support Arthur Scargill in his attempt to close down the steelworks in my constituency, with the loss of 10,000 jobs? Does that not indicate the type of spending programmes that Left-wing authorities are prepared to pursue?

Mr. Waldegrave: The first two councils that my hon. Friend mentioned sought conflict for the sake of conflict,


regardless of the damage to ratepayers, to local business, or to anybody else. It is noticeable that Scunthorpe is 60 per cent. over the average for shire district councils. For example, it is 162 per cent. over the average in its expenditure on sports and recreation, but I doubt whether its services are 162 per cent. better. There is, therefore, tremendous room for them to make savings and bring practical help to local business.

Mr. O'Brien: Has the Minister made any assessment of the effect of the abolition of the West Yorkshire metropolitan county council on rates in West Yorkshire and of the effect of the reduction in rate support grant, which has led to a substantial increase in the rates that are paid by ratepayers in West Yorkshire? Has the Minister assessed the Government's actions that have caused such high rates in West Yorkshire?

Mr. Waldegrave: I have made a detailed assessment of the fact that the outgoing West Yorkshire metropolitan county council fiddled the books last year and thereby made the rates this year seem much higher. If it had rated at a proper level last year, the rate increases in the successor district councils would have been perfectly reasonable.

Mr. Nicholls: Is my hon. Friend aware of how far that process has gone in the alliance-controlled Devon county council? In the education department alone staffing has been increased by 10 per cent. That has resulted in a rates increase of about 400 per cent., plus loss of grant. That is the price that was demanded for the abolition of the remaining grammar schools. Is my hon. Friend able to imagine what effect that has had on the local economy?

Mr. Waldegrave: One of the most marked effects of having hung councils or, even worse, Liberal-controlled councils—this may be an extraordinary and rather shaming fact for the high spenders on the alliance Benches to have to acknowledge—is that they manage to lose control of expenditure even more effectively than does the Labour party. The facts show that the rate increases in the hung councils and the Liberal councils in the shire counties are higher than the rate increases in both Labour and Conservative-controlled councils.

Mr. Simon Hughes: Will the Minister accept that he has given a very misleading answer? Calderdale, which is a balanced council, has imposed this year a 41 per cent. rates increase, of which 2 per cent. was charged by Calderdale. The rest was charged by the joint boards and quangos that were set up by the Minister's Department. At the same time, boroughs such as Kensington and Chelsea, which hardly need a reduction, have had a 26 per cent. rates decrease, while people in Hove are paying no rates at all. How can that be a successful product of the Government's new rating policies as they affect the country?

Mr. Waldegrave: I shall be canvassing next week in Kensington and Chelsea, and I shall make use of the hon. Gentleman's useful remark that the Liberal party's view is that the rates in Kensington and Chelsea should be increased. It was the creative accounting, to use the technical term, of the outgoing metropolitan counties that caused the problem in Calderdale. The figures show that hung councils and Liberal councils are higher raters than either Labour or Conservative councils. That must be very shaming for the Liberal party.

Mr. Spencer: Is my hon. Friend aware that last year, in its publication "Ratewatch", the CBI said that some councillors were either, at best, ill-informed or, at worst, naive and absurd? In view of the efforts of the Labour-controlled city councils and the alliance and Liberal county councils, which have increased the rates by almost 40 per cent. this year, does he not think that the latter, description is more accurate and that it fully justifies the proposal to have non-domestic rates fixed at national level?

Mr. Waldegrave: It is true that the behaviour of some of these councils is every day making it easier for us to argue that we need the radical reforms that we have put forward.

Mr. Tony Banks: When will the Minister stop using the big lie technique of saying that there is a direct link between rate levels and business failures? The Minister surely knows that the major reasons for business failures in Britain are the state of order books, which depends on the state of the economy, interest rates, and so on. They are all factors that are influenced entirely by Government policies. If the Minister really thinks that there is a direct correlation, why does he not analyse the 7,000 company bankruptcies and the 15,000 liquidations last year to see whether rates were a factor in those failures? If he will not do that, will he start analysing the failures that will continue to flow from Government policies, to see what the correlation is?

Mr. Waldegrave: The hon. Gentleman is not a very effective representative of the new grey Labour party. The truth is that as a result of Government policies interest rates are now falling and in many areas the unavoidable business cost that is increasing is the business rate. There is no question about that, and I shall be happy to analyse it. Indeed, a number of chambers of commerce and others have sent us good material on the critical effect that rates can have in marginal situations.

Mr. Holt: My hon. Friend can take heart from the fact that my constituency, which enjoys the highest unemployment and the highest rates in Britain, is looking forward to the day when the Secretary of State rate caps it, or, better still, gets rid of Cleveland county council altogether. That has no friends in my constituency.

Mr. Waldegrave: I have to disappoint my hon. Friend. At the moment we have no further proposals for local government reorganisation to put before the House, although there are some in Bristol who feel about the county seat of Avon as my hon. Friend does about Cleveland county council. My hon. Friend is right. In the short term the best thing to do is to get a Conservative council back to bring effective help to local businesses.

Mr. Straw: Why does the Minister not have the guts to admit that rates have risen by three times the level of inflation this year and twice the level of inflation in the seven years of Conservative Government because of the £17ʷ5 billion cumulative cuts in rate support grant for which the Government are responsible? Does he not understand that it is an outrageous slur against the outgoing councillors of West Yorkshire to suggest now what he has never suggested in the past 12 months, that rates have gone up in West Yorkshire by 28·3 per cent. because of some kind of fiddling by them. Rates have gone up in West Yorkshire, the West Midlands, Tyne and Wear, South


Yorkshire, Merseyside, Greater Manchester, and in Conservative shire counties by 17·6 per cent., because of the Government's policies in cutting the rate support grant.

Mr. Waldegrave: The hon. Gentleman is wrong. In two of the ex-metropolitan county areas in particular—Merseyside and West Yorkshire—a critical factor in the high rates this year was creative accounting by outgoing councils. This is not the first time that I have said what I did today about West Yorkshire. I have repeated it on many occasions because it is true. The hon. Gentleman tries, as usual, to obfuscate the issue. The fact is that Labour authorities mean higher spending. I regret that we are seeing an increase in real terms in expenditure in many Labour authorities and, I fear, a few Conservative authorities. That is why the rates are increasing so much.

Nuclear Waste

Mr. Meadowcroft: asked the Secretary of State for the Environment what recent representations he has received concerning the disposal of nuclear waste.

Mr. Waldegrave: I have had a wide range of representations, from hon. Members and others, mostly concerning the recent announcement of alternative possible sites for the disposal of low-level and short-lived intermediate level wastes.

Mr. Meadowcroft: Given the immense and proper concern about nuclear waste disposal, will the Minister give us two undertakings: first, that the Select Committee's report will be debated before the orders are laid; and, secondly, that the debate on the Select Committee's report will not be regarded as the debate on the orders themselves?

Mr. Waldegrave: Those matters are obviously for consideration by my right hon. and hon. Friends, and I am sure that they will have heard what the hon. Gentleman said.

Mr. Michael Brown: I thank my hon. Friend for visiting my constituency on Monday morning. In connection with the representations to which he referred in answer to the question from the hon. Member for Leeds, West (Mr. Meadowcroft), will he confirm that many of those representations come from South Killingholme and from my constituency? Will he urge his right hon. Friend the Secretary of State to give serious consideration to the point made by the hon. Member for Leeds, West about the need for a debate on the Select Committee report? Does my hon. Friend stand by his parliamentary answer to me when he said that he would lay the special development order before the end of April, as that is nine days away?

Mr. Waldegrave: I confirm that the point made by the hon. Member for Leeds, West (Mr. Meadowcroft) was also made to me by my hon. Friend and by many of those whom I met during the enjoyable but anxious day that I spent on Humberside. As for my hon. Friend's latter point, I cannot yet give him the exact date on which the special development order will be laid, but I hope that there will be no undue delay about that.

Mr. Frank Cook: I thank the Minister for the courtesy that he showed last week in forwarding to me on publication the report made on the contribution of nuclear establishments to acid deposition, which reported that the

degree of deposition was practically nil. Can he therefore understand the astonishment that I felt when I saw the minutes of the Dungeness local liaison committee meeting of 6 December 1985, which reported on the Central Electricity Generating Board's proposals to strip Magnox cladding from fuel rods, to dissolve that cladding in acid and to dispose of the sludge directly into the sea? Will the Minister explain how that process was licensed and why it was started? How can he square the open proposals to have dry storage at Trawsfynydd with the covert proposals to pollute the ocean?

Mr. Waldegrave: I am grateful for the hon. Gentleman's first point about the contribution by nuclear power stations to the acid rain problem. The research has shown that that is not a problem. The CEGB proposals to which the hon. Gentleman referred would proceed only if the sludge came within the existing authorisation which my Department laid down for that power station. If that technique is to be used, it would have to be used within the existing authorisation so there would be no significant addition to the amount of radioactivity in the sea.

Mr. Hickmet: Will the Select Committee's report be debated before the special development order is laid? If not, why not?

Mr. Waldegrave: I cannot yet give a clear answer to my hon. Friend on that point.

Dr. Cunningham: Does the Minister accept that the Labour party would like a debate on the report of the Select Committee on the Environment on this matter? Is it not clear that the useful life of the Drigg disposal site in my constituency is quickly coming to an end and that it is a national requirement that an alternative site for the disposal of low-level radioactive waste should be found? Is it true that most people believe—and I hope that the Government accept—that the discharge of low-level waste to the marine environment should be abolished, not increased? Why will the Government not set a target date now for the abolition of discharges to the Irish sea and impose an annual reduction on those discharges until that target is met? In that connection, it must be foolish to agree that the CEGB should dispose of additional waste from Dungeness. No such authorisation should be granted.

Mr. Waldegrave: I have had only a brief opportunity to study the hon. Gentleman's last point, but I believe that no new authorisation would be needed, as it would be within the existing authorisation. I agree with the hon. Gentleman's first point. Some people see a great extension of Drigg as being the way to solve all the problems. I do not believe that that is so. If, as some people say, there were to be intense compaction of waste, which would then be deposited at Drigg, Drigg would have to take more radioactivity than should properly be posited there. The Government agree on that point.
There is a steady diminution in the amount of radioactive material that is placed at sea. We are now putting to sea a tenth of what was being deposited 10 years ago, and in 10 years' time we shall be depositing only a tenth of that. That is steady progress. I think that there will always be some trivial outputs to the sea from Sellafield, but our objective is to reduce the level to the best in the world, which is at Cap la Hague.

Rates

Mr. Geraint Howells: asked the Secretary of State for the Environment what is his estimate of the loss of revenue incurred by local authorities due to the late setting of rates; and if he will make a statement.

The Parliamentary Under-Secretary of State for the Environment (Mrs. Angela Rumbold): All rating authorities in England had set a rate for 1986–87 by 1 April 1986. It is for the independent district auditor to decide whether losses arose and, if so, to what extent, in those authorities which delayed setting a rate for 1985–86.

Mr. Howells: Does the Minister agree that five London boroughs have lost a total income of over £100 million this year because of the late setting of rates? What plans has she to inform the electorate before the May elections of this loss?

Mrs. Rumbold: I cannot confirm or deny the figures that the hon. Gentleman has given, as it is a matter entirely for the local district auditors to determine and then to report.

Mr. Peter Bruinvels: Does my hon. Friend agree that the behaviour of Left-wing Labour councils in failing to set a rate until the last minute was a breach of statutory duty? Can she estimate the amount of lost revenue in interest and say when the district auditors will be brought in, which should act as a preventive measure for any other local authorities which fail to behave in a decent and civilised way?

Mrs. Rumbold: I commend my hon. Friend for his continued attack upon the extravagance and nonsensical waste that has been a feature of the councils within his constituency. The district auditors, however, have to take these decisions for themselves, as the Secretary of State has no powers to direct them.

Mr. Tony Banks: Is the Minister aware of the chaos that will ensue, and the impact that it will have on London boroughs, if about 200 councillors find themsleves disqualified through the actions of the district auditor? Will the Minister make it quite clear to the district auditor, who I assume is always a Tory stooge and not independent, that such chaos should not be visited upon London local government structures?

Mrs. Rumbold: It is disgraceful to say that the district auditor or any other person who is appointed independently is a Tory anything. It is especially disgraceful to allege that he will be a stooge. Councillors have been disqualified quite properly because of their squalid actions and disregard of a law that has been established for some considerable time, well before the arrival of the Government. The actions of these councillors means that they have brought disqualification upon themselves. It is for the electors of the district and borough councils to pass judgment on them on 8 May, which I hope they will do.

Rural Environment

Mr. Adley: asked the Secretary of State for the Environment what further steps he intends to take to protect the rural environment; and if he will make a statement.

The Secretary of State for the Environment (Mr. Kenneth Baker): We have decided to support the Broads

Bill and to extend the landscape areas special development order to cover the design, appearance and siting of farm and forestry buildings and roads in all national parks. The House will be aware of my various statements about the importance of preserving the green belt.

Mr. Adley: I thank my right hon. Friend for that reply. I thank him also for what has been a perceived and noticeable change of attitude on the part of his Department towards the protection of the environment over the past few months. Will he accept from me that if the Government fail to recognise the rising tide of anger that is felt when many local authority planning decisions are overthrown by his Department, the Government will reap a whirlwind and will deserve everything that they get?

Mr. Baker: I thank my hon. Friend for his remarks. I assure him that I consider that the protection of the countryside is one of my major responsibilities. We have a uniquely beautiful inheritance in the English countryside which we must cherish and protect.

Mr. Michael Forsyth: Is my right hon. Friend aware of the increasing concern that is being expressed in rural areas about the insensitive planting of coniferious trees and the effect that it is having on fishing interests and on acid ground water levels, which are destroying spawning beds and the fish population and having a considerable impact on the environment and the rural economy?

Mr. Baker: I am grateful to a Scottish Member for drawing this to my attention, but it is not an exclusively Scottish problem, because there have been quite large plantings of what are virtually conifer forests in the south of England and I and my colleagues are having a look at the effect of that.

Mr. David Clark: As the Government now appear to have conceded that acid rain from British power stations is causing damage to our Scandinavian neighbours, will the right hon. Gentleman also accept that those same emissions are causing great damage to our own United Kingdom environment, with the result that we have dead lochs in Galloway, dying lakes in Cumbria and waterways in central Wales which can no longer support fish? Will he accept his responsibility and take some action to reduce the level of acidic emissions and thus try to protect a little more our precious British countryside?

Mr. Baker: The hon. Gentleman, who follows these matters very closely, will know that there is a complicated causal link between the emissions from factories and the increase in acidity of lakes and damage to forests. I would only point out—and I think that the hon. Gentleman would be the first to recognise this—that in our country we have a very good record of reducing the sulphur dioxide and nitric oxide emissions from heavy plants. In fact, we have reduced them by over 40 per cent.

Mr. Chapman: I warmly welcome my right hon. Friend's commitment to the protection of the green belts, which is surely the best way to protect 4·5 million acres of England's countryside. Will he accept the thanks of many environment organisations for accepting an amendment to the Housing and Planning Bill that will ensure that simplified planning zones cannot be set up in green belts, national parks, areas of outstanding natural beauty and, of course, green belt conservation areas?

Mr. Baker: My hon. Friend is correct to say that in the amendments to the Housing and Planning Bill we have


made it clear that simplified zones will not be applied in the areas that he has mentioned. I believe that there is widespread agreement in the House on the importance of preserving the green belt, which is one of the most successful planning inventions of this century. It was devised in Britain and green belts now extend to some 4·5 million acres. In fact, we have doubled the size of green belts since 1979.

Water Authorities (Privatisation)

Mrs. Clwyd: asked the Secretary of State for the Environment what representations he has received from Birmingham city council regarding the privatisation of water authorities.

Mr. John Patten: None.

Mrs. Clwyd: Is the Minister aware that Birmingham city council, which invested in reservoirs in Wales during the last century and was perfectly happy to see those assets managed by a public authority—in this case the Welsh water authority—is not happy to see those assets sold to line the pockets of the Government's friends and that it is demanding compensation—either £270 million in compensation or a portion of Wales, the Elan valley? Which will the Government give to it?

Mr. Patten: I have already made it clear that I have received no representations from Birmingham. I think that the habit of answering hypothetical questions about hypothetical representations is rather a bad one.

Mr. Beaumont-Dark: Perhaps I might ask an unhypothetical question. Bearing in mind that the citizens of Birmingham spent millions of pounds on acquiring this water system and buying 43,000 acres of land, does my hon. Friend not think that there should be some system of compensation, since we gave to what we thought was a public authority? Is we are to sell and to privatise, which may be a good policy, why should Birmingham not get back some of the money of which it was deprived some years ago?

Mr. Patten: I do not think that I should break the habit of not answering hypothetical questions, even from my hon. Friend, but perhaps I could answer another question which was implicit in what he said. In 1973 the Water Act vested the ownership of the assets and the debts of water authorities in the water authorities. They have, therefore, become public corporations answerable to the Government.

Mr. Wigley: The Minister should be aware that Brimingham corporation has passed a resolution on this matter. Over the years Birmingham has shamelessly exploited Welsh water resources and is able to sell water to its own citizens at half the price at which the same water is available in Wales. It is totally unacceptable that Birmingham corporation should now go on a rampage, grabbing land in Wales, in total opposition to the wishes of the Welsh people.

Mr. Patten: We are absolutely against shameless exploitation. Under water privatisation we shall ensure that the director general of whatever we end up calling it will have the power to make sure that bulk transfers from one water authority to another under a privatised regime are properly paid for and properly accounted for.

Mr. Forth: May I tell my hon. Friend that I am a Birmingham ratepayer, and that as such I welcome the proposals to privatise the water industry? I hope that Birmingham's residents and water users will benefit from the Government's privatisation proposals and will be able to shop around for the best deal available for the supply of water.

Mr. Patten: My hon. Friend is right. Privatisation will bring many advantages to the consumer.

Mr. Boyes: Birmingham city council has passed a resolution deploring the privatisation of water authorities and if—I stress the word if—that anti-social policy is carried out, the ratepayers of Birmingham should be fully compensated. A number of other authorities are in a similar position. Water authorities are public assets, not state assets. The Government have no economic, political, legal or moral right to sell assets which they do not own, estimated to be worth £27 billion, to their friends in the City at knockdown prices.

Mr. Patten: I have already explained the legal position. It is that the Water Act 1973 transferred the ownership of the previous assets and the liability of previous debts to the water authorities. Those water authorities became public corporations answerable to the Government. In the privatisation of the water authorities we shall follow the precedent set in the privatisation of British Telecom and British Gas and turn the water authorities into Crown companies. Ownership of assets and liability for debts will be taken on by those Crown companies prior to the successful eventual flotation that will do so much for the consumer.

Mr. Gow: What steps were taken by the Labour party when it was in government, as it is apparently so dissatisfied with the Water Act 1973, to amend that Act so as to frustrate the excellent purpose that is in the mind of my hon. Friend?

Mr. Patten: My hon. Friend did a great deal for the water industry when he was a Minister in the Department of the Environment, and he has put his finger exactly and precisely on the point. The Labour Government did nothing at all.

Rates

Mr. Litherland: asked the Secretary of State for the Environment what was the average weekly domestic rate bill in April 1979 and in April 1986.

Mrs. Rumbold: It was £3 in April 1979 and £7·70 in April 1986.

Mr. Litherland: Does the Minister agree that those figures show the effect of the Government's vicious cuts on local authorities? Those cuts are estimated at £1 million a week in Manchester, and that means that the ratepayer has to pay more for fewer services. Perhaps Government Ministers would like to come and canvass in Manchester. There would not be a hung council there, but there would probably be a few hanged Ministers because of what the Government are doing to that area.

Mrs. Rumbold: I am interested to learn from the hon. Gentleman that services in Manchester have been reduced, because the real term increase has been in the region of 9 per cent. If local authorities had looked at and obeyed the


guidelines set out by the Government year after year for rate increases, they would have been able not only to help their ratepayers but to provide perfectly adequate services.

Mr. Stern: Does my hon. Friend agree that the rate increase over the last seven years, whatever its cause, is a substantial burden on the domestic ratepayer? Will she take every opportunity to make it clear to the electorate that ours is the only party that is prepared to lift this burden?

Mrs. Rumbold: What my hon. Friend says is true. In all instances of carefully managed and well-run Conservative authorities the ratepayers have been the beneficiaries. Sadly, that has not been the case in authorities controlled by Labour or by the Liberal/SDP alliance. Ratepayers can feel safe only under the Conservatives.

Mr. Clelland: Notwithstanding what the Minister said about the Government's policy towards rate increases, does she accept that local authorities have been able to maintain their services over the years only by using creative accountancy methods? Those methods are now running out, as evidenced by the horrendous rate rises that have had to be imposed in Gateshead to maintain services at a high level. Does she accept that only creative accountancy and not the Government's policies have enabled us to maintain a high level of services?

Mrs. Rumbold: No, I do not accept that. Sadly, creative accountancy will not protect ratepayers from the extravagances of authorities which use such procedures. It will not be long before those authorities—and they are mostly Labour-controlled—which have used creative accountancy will find that their ratepayers will, sadly, have to pay the bill.

Mr. Heathcoat-Amory: Is my hon. Friend aware that her figure for this year will include the 26 per cent. rate increase put through by the Lib-Lab pact running Somerset county council? That increase is mostly due to increased expenditure. Does she agree that it makes life very difficult for ratepayers and businesses, and blows sky-high the pretence that the Opposition parties are seriously interested in solving unemployment?

Mrs. Rumbold: I agree with my hon. Friend. Those who are anxious to create businesses find it devastating to have to contend with such rate increases.

Mr. Simon Hughes: Is it not relevant to ask how much of the weekly domestic rate bill is attributable to the late setting of rates last year? That figure can now be worked out. A private letter has been sent by the district auditor to the chief executives of the offending London boroughs. The information should be made public. The figures show that one borough suffered a £50 million loss. My borough of Southwark lost £25 million [Interruption.] Other boroughs have figures that are not much lower. Will the Minister make the figures known so that the ratepayers can judge?

Mrs. Rumbold: The hon. Gentleman is sightly confused. I say only "slightly confused", which is a great tribute to him. He knows perfectly well that the facts that he wants will be examined by the district auditor, and will be made known as and when those councils which receive such figures have studied them and made them known to their electorates.

Local Authority Capital Receipts

Mr. Latham: asked the Secretary of State for the Environment if he will make a statement on the proposed level of capital receipts which local authorities will be permitted to use on building work in the financial year 1986–87.

Mrs. Rumbold: I announced in answer to my hon. Friend the Member for Lewisham, East (Mr. Moyniham) on 20 November, at column 246, that there will be no changes for 1986–87 in the prescribed proportion of capital receipts which local authorities may use for additional capital expenditure.

Mr. Latham: Following the chink of hope in the speech yesterday of my hon. Friend the Minister for Housing, Urban Affairs and Construction, will my hon. Friend consider whether she can loosen the purse strings to some extent in the forthcoming year to help a new improvement grant programme? Even raising the figure to 25 per cent. would be agreat help.

Mrs. Rumbold: I understand why my hon. Friend has asked that question, but he will be aware that it is not possible for me to pre-empt the decisions for next year to be taken by my right hon. Friend the Secretary of State. However, we are considering new proposals for capital expenditure generally. It may well be that my hon. Friend's representations will be taken into account.

Mr. Loyden: Given the needs of many of our major cities, what justification do the Government have for imposing constraints on local authorities and for not allowing them to use their resources to solve the many problems that exist?

Mrs. Rumbold: Given the way in which Liverpool city council has generally managed its affairs, it is hard to imagine that it would manage greater receipts any better than it has administered any money that has come into its hands. I feel very sorry and sad for the people of Liverpool.

Mr. Dickens: Does my hon. Friend agree that most local authorities have played the game by selling council houses in accordance with this Government's policy and wish? The Labour party has now taken that policy on board—[Interruption.] Well, the Labour party might take it on board. Should not local authorities gain some reward in the form of a relaxation in the amount of money that they can spend on the improvement grant system?

Mrs. Rumbold: My hon. Friend knows that the Labour party is simply saying that it will adopt our very successful policy of council house sales. Whether or not that is to be believed is a matter for speculation. As for capital receipts, half a billion pounds extra in capital receipts came into play during the course of this financial year, and authorities are able to spend a proportion of that towards their allocation.

Mr. John Fraser: Can the Minister deny the rumours that are beginning to circulate to the effect that the Government are about to impose either a moratorium or a restriction on capital expenditure by local authorities later this year? Will the Government give a clear instruction to the London Residuary Body that the £39 million of capital receipts, which are legally—and certainly morally—due to London authorities which


have ex-GLC estates, will be disbursed to those boroughs and not given to some Tory boroughs, which make no contribution to London's housing problems?

Mrs. Rumbold: It seems that the Labour party is consumed with the local elections on 8 May. I must say on both counts that the hon. Gentleman is indulging in scaremongering.

Housing Investment Programme

Mr. Dormand: asked the Secretary of State for the Environment if he will identify separate housing investment allocations for works to new town dwellings; and if he will make a statement.

Sir George Young: No; separate allocations of this kind would deny the councils in question the freedom to decide their own priorities in the use of the total amounts of housing investment resources which can be made available to them.

Mr. Dormand: Is the Minister aware of the serious situation facing some towns, not least Peterlee, in my own constituency? In view of the answers that he has given, may I assure him that Peterlee would be prepared to sacrifice some of the freedom to which he referred if it could get a few more million pounds? How can the Government honour their commitment to new towns without having separate identifiable allocations within the housing investment programme? Will he say how Easington district council can meet the £40 million repairs needed in Peterlee with the allocation of £7·5 million that is being granted by the Government?

Sir George Young: I well remember the issues, because I negotiated the memorandum with the local authorities concerned. The memorandum said that local authorities should draw the attention of my Department to the bid for the expenditure on remedial work which had been accepted for grants, so that in its turn the Department could ensure that those needs were reflected in the allocations. For the year 1986–87 we took account of the expenditure implications facing the hon. Gentleman's local authority regarding the stock that it inherited from new towns. I cannot see how separate identification could make the problem any easier. The local authority has flexibility already, if it wishes to supplement its resources, to spend more on the new town dwellings. I have sympathy with the problem, and I will see whether I can help in the forthcoming negotiations for next year's allocations.

Rate Support Grant

Mr. Madden: asked the Secretary of State for the Environment when he proposes announcing the rate support grant settlement for 1987–88.

Mr. Waldegrave: My right hon. Friend hopes to be able to announce the rate support grant settlement for 1987–88 in about the middle of November 1986, about a month earlier than in recent years.

Mr. Madden: Will the Minister acknowledge that the massive reductions in rate support grant have led to large rate increases in places such as Bradford, where the Conservative-Liberal alliance has increased rates by 30 per cent.? Will he also take this opportunity to apologise for the slur on the West Yorkshire county council that he made

just now, suggesting that it fiddled the books last year? Will he also give a clear assurance that when the grant is announced there will be no further stealing of resources by central Government from hard-pressed local authorities, which are desperately trying to meet the urgent social needs in their areas?

Mr. Waldegrave: I think that I would probably be insulting those outgoing Labour councillors if I apologised. I am sure that they regarded their manoeuvres as being thoroughly successful. Their objective was to put up the rates for successor authorities, and they did it. Then, Parliament did not allow us to prevent such things happening, as we did not have the powers to control the councils in the outgoing year. Such manoeuvres were, I am afraid, inevitable. They have been disastrously brought home in the West Yorkshire area.

Mr. Watts: In setting the rate support grant settlement for next year, no doubt my right hon. Friend will have in mind the problems of the shire counties. May I ask whether he shares my dismay that so many of the shire counties, which bleated so loudly about loss of grant this year, have chosen not to pass on the benefits of guaranteed recycling of grant to ratepayers, thereby inflicting on ratepayers much higher levels of rate increase than were otherwise necessary?

Mr. Waldegrave: If they did not pass it on this year, they have it in the balance for next year. I am sure that many councils will take account of that in due course. More important, my right hon. Friend has heard what my hon. Friend said about the shire counties. The whole process of consultation will begin soon in the normal way.

Dr. Cunningham: Is it not clear to anyone who examines the position that the biggest single reason why rates have increased for all authorities has been the seven successive reductions in rate support grant, enforced as a deliberate policy by the Government, resulting in a cumulative loss to local authorities in excess of £17·5 billion? Will the Minister accept that his right hon. Friend's claim—it is noticeable that the Secretary of State has ducked all these issues today—in the newspapers yesterday that average rateable values are what count to those who have to pay rates is a charade? It is rate bills that count to people faced with these problems, and average weekly rate bills have risen under this Government from £2·98 per week to £7·70 per week. Is that not why the chairman of the Conservative party is running scared about the local elections on 8 May, when the Tory party will get a pasting? Is tnat not why he is blaming poor people for the coming defeat and suggesting that it is because poorer people do not support the Government that they will lose? They will certainly lose, but on the basis of the electorate as a whole.

Mr. Waldegrave: If I may interrupt the hon. Member's not very brilliant hustings speech for a moment, would he like to tell the House straightforwardly on which tax—income tax or VAT—the £4 billion or more additional grant that he is pledging to give back to local authorities will fall? Will it go on to the basic rate, or is it, along with the other £25 billion additional expenditure, to go on all taxes and interest rates? In due course the good friend of my hon. Friend the Member for Eastbourne (Mr. Gow), the good doctor in the International Monetary Fund, will return to give them the bill once again.

Mr. Greenway: Would my hon. Friend like to come, and invite the Opposition spokesman to come with him, into the real world at Witton avenue east in Conservative-controlled Ealing, where he will find that the rates are half what they are on the opposite side of the road, which has been in Labour-controlled Brent for umpteen years? Will my hon. Friend remind the Opposition spokesman, and every voter, that the Labour party, when it took over the GLC in 1981, doubled the rates at the same time as it doubled fares for Londoners?

Mr. Waldegrave: My hon. Friend is right. Indeed, Ealing must be defined as the centre of the real world. There can be no doubt at all—it seems disingenuous of the Labour party even to try to deny it—that Labour is the party of high spending, and therefore of high taxing and high rating. It would be more honourable of the Labour party to fight openly on that platform—an honourable and ancient platform of that party, on which it normally loses—rather than to try to obfuscate the issue.

Publicly Owned Land (Northern Region)

Mr. Fallon: asked the Secretary of State for the Environment how many areas of publicly owned land in the northern region are currently unused or underdeveloped.

Mr. John Patten: On 1 April 1986 the registers of unused and underused publicly owned land in the northern region held 935 sites totalling 12,613 acres, which is far too much.

Mr. Fallon: Is that not an appalling waste of development potential in the north? Will my hon. Friend confirm that he will not hesitate to use his powers to compel local councils to release land that is urgently needed for better housing, jobs and commercial development?

Mr. Patten: Yes, Sir, we shall use those powers. We are doing so increasingly in places such as Darlington and Sunderland. It distresses me very much when local councillors come on delegations to the Department of the Environment to ask for more money, when they are doing so little with the land that councils own and occupy. I do not know what the Labour party's attitude is to derelict and unused land. It is probably as ambivalent as its attitude to the right to buy, so brilliantly summed up yesterday by my hon. Friend the Member for Ealing, Acton (Sir G. Young), the Parliamentary Under-Secretary of State, when he said that the Labour party's attitude to buying was, "Yes, if you

want to buy your council home you may, but if the council wants to stop you buying its council home, it can do that as well."

Mr. Eastham: In Manchester, a 23-acre prime site was sold off to private developers, changing hands three times and stood derelict for 15 years until finally the local authority had to buy it and develop it for the G-MEX exhibition hall. Is that the kind of thing the Minister would really applaud?

Mr. Patten: The G-MEX exhibition hall was funded with Government and European money, as the hon. Gentleman knows. Manchester is sitting on far too much land. It should be getting rid of it in the interests of its ratepayers.

Local Government Reform

Mr. Park: asked the Secretary of State for the Environment if he proposes meeting representatives of voluntary organisations to discuss future funding arrangements following the abolition of the Greater London council and the metropolitan county councils.

Sir George Young: My right hon. Friend met representatives of voluntary organisations on 24 March to discuss this. The London Voluntary Service Council telephoned my Department yesterday to seek a further meeting, and it will be meeting my officials tomorrow.

Mr. Park: Is the Minister aware that voluntary bodies engaged in worthwhile projects are being wound up because district councils cannot fund them? Will he consider, in advance of the Widdicombe report, increasing the section 137 money from 2p to 4p so that the new responsibilities can be met?

Sir George Young: My Department is awaiting the report of the Widdicombe inquiry with bated breath. We understand that it is not far away. When we have the report, we will be able to decide on the 2p rate under section 137.

Mr. O'Brien: On a point of order, Mr. Speaker.

Mr. Speaker: Arising out of questions?

Mr. O'Brien: Yes. Will you, Mr. Speaker, uphold the dignity and decorum of the Chamber by asking the Minister for Environment, Countryside and Local Government either to substantiate what he said about the outgoing West Yorkshire county councilors—

Mr. Speaker: Order. I am afraid that answers to supplementary questions from the Front Bench are not a matter for me.

Foreign Affairs Council

The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): With permission, I should like to make a statement about the meeting of Foreign Ministers of the Twelve that took place in Luxembourg on 21 April, and the meeting of the Foreign Affairs Council which followed on 21 and 22 April. My hon. Friend the Minister of State—the hon. Member for Wallasey (Mrs. Chalker)—and I attended.
The meeting of Foreign Ministers concentrated on the urgent problem of Libya. We had already agreed in the emergency meetings on 14 and 17 April on the importance of taking effective collective action to prevent further acts of Libyan state-directed terrorism and to defend ourselves against the threat. We agreed on 21 April to the following series of measures to this end: a severe cut in the size of people's bureaux throughout the Community; confining members of those bureaux to the city where they are officially assigned; restricting the size of other official Libyan bodies to the minimum necessary for their stated business; applying a much stricter visa regime to Libyans; and ensuring that any Libyan expelled from one member state will be expelled from the Community as a whole.
The Twelve also reaffirmed their ban on arms sales to Libya, and will be pressing other countries to join it. They agreed to look urgently at further action on the abuse of diplomatic immunity. Interior Ministers of the Twelve will be meeting today in the TREVI group to concert the closest possible co-operation between Interior Ministers, the police and security services of the Twelve. Transport Ministers have been asked to step up their co-operation urgently on aviation security. We shall follow up all these decisions urgently with our partners.
To have achieved an effective package of measures against Libya, in force throughout the Community, is a considerable step forward. We shall continue to press for further action and for vigorous implementation of the programme of action now agreed.
The Foreign Affairs Council briefly reviewed the issues likely to be discussed at the Tokyo economic summit. Ministers discussed improvements to the Community's mandate for the negotiations with Mediterranean third countries on the adaptation of their co-operation and association agreements to take account of the accession of Spain and Portugal.
There was a brief discussion of the new Community/Thailand manioc agreement; this is expected to be formally agreed at another Council in the near future. The Council also reviewed and confirmed the position to be adopted by the Community at the ACP-EC Council of Ministers which begins in Barbados on 26 April.
The Council discussed the complaint of the United States about trade loss as a result of the enlargement of the Community. It reconfirmed the Community's readiness to settle the issue in early GATT negotiations and agreed a mandate for the Commission to conduct those negotiations. Ministers regretted the United States' intention to take unilateral retaliatory action and noted that the Community would be bound to take equivalent measures to defend its interests
The Council reviewed progress on implementation of the report of the People's Europe Committee and agreed

to adopt the Council of Europe flag for use on appropriate occasions. No requirements are placed on member states by this agreement.
There was an exchange of views on the budgetary situation. It will now be for the Council of Finance Ministers, meeting on 28 April, to consider in detail the 1986 budgetary situation and the 1987 reference framework for expenditure.
That, too, will clearly be an important meeting.

Mr. Denis Healey: I notice that the Foreign Secretary has described the decision of the European Council as a step forward. The last position from which we were said to be stepping forward was described by the right hon. and learned Gentleman as "vigorous and appropriate" and by the Prime Minister as "passive and supine". Can the right hon. and learned Gentleman tell us how far these decisions represent a step forward, and from what base?
Secondly, why did the right hon. and learned Gentleman not press on his colleagues some economic or financial sanctions such as the withdrawal of export credit—[Interruption.] In answer to the supine intervention of some anonymous hon. Member on the Government Benches I would point out that the financial sanctions against Iran that followed the taking of the American hostages proved to play a major role in securing their release. The Libyan situation is not dissimilar in many respects.
Thirdly, I understand, although the right hon. and learned Gentleman did not mention the point, that the Council agreed to send missions to the United States, the non-aligned countries, the Arab world and Libya to explain its position. When will those missions leave? How will they be composed? Precisely what position will they be explaining?
Fourthly, can the right hon. and learned Gentleman tell us anything about the effect on British trade with the Arab world of the decision taken by Her Majesty's Government? Saudi Arabia and the United Arab Emirates have already cancelled visits to Britain to discuss the increase of trade, and I understand that the American company AT and T has decided not to participate in an electronics fair in Britain for fear of terrorist action against it, following the British decision.
Finally, why is the right hon. and learned Gentleman so supine in responding to the American position on all those issues? We know now that 21¼ tonnes of C4 plastic explosive were exported from the United States to Libya by an ex-CIA agent. Only a few ounces of that explosive were required to blow up the TWA aircraft recently. We have heard this morning that the United States has discovered an arms ring operating in America which was planning to export over $2 billion of fighter aircraft, tanks and missiles to Iran and terrorist organisations via Israel. Did the right hon. and learned Gentleman discuss with his colleagues the part played in that operation by citizens of the United Kingdom, France, Germany, Italy and Greece?
As President Reagan is still threatening further action of the same nature as last week's against states that he regards as fostering terrorism, could the right hon. and learned Gentleman make it clear to his Common Market colleagues that Her Majesty's Government will not again act as a Trojan horse of the United States by authorising the use of RAF bases without bothering to find out what specific targets are to be attacked, and with what


weapons? If not, did he propose to his Common Market colleagues that the European Community flag should be the stars and stripes?

Sir Geoffrey Howe: So far as flags are concerned, I was content to endorse the sensible proposition that on European occasions the Council of Europe flag should be worn—should be displayed. [Laughter.] I contrast that with the reported attitude of the Opposition, who although the red flag has been their banner for as long as man can remember, are now attempting to conceal that banner in an attempt to mislead the people.
The right hon. Gentleman asked a range of fanciful questions. He must try to restrain his enthusiasm for new epithets when he finds them. The word "supine" has been over-used in his vocabulary.
The substance of the information disclosed today, stopping short of the right hon. Gentleman's fanciful ramblings, is that action is being taken by the authorities in the United States against a conspiracy for the export of arms to illegal destinations. That is something we should applaud and endorse. That is all there is to be said about the matter.
As my right hon. Friend the Prime Minister and I made plain in the House last week, any question of further action by the United States would be a matter for separate consideration in quite separate circumstances when and if it did arise.
I shall now deal with the substance of what the right hon. Gentleman asked. The reaction of many countries in the Arab world has been a great deal more understanding than many people at first thought of the horror with which the Western democracies react against sustained Libyan state-directed terrorism. The Saudi business mission to which the right hon. Gentleman referred is in the country at present.
The issue of economic sanctions has been dealt with frequently. Experience of the cases in which they have been used previously shows that they have not proved to be an effective weapon. They cannot even be regarded as decisive in the case of Iran.
The right hon. Gentleman mentioned a step forward. As a result of the meeting this week, there was agreement throughout the Community on the wide range of measures I told the House about in my original statement. That represents a significant advance, as can be evidenced by the reaction of Libya to what has already been done.

Mr. Andrew MacKay: Is my right hon. and learned Friend aware that many of us will feel that he has been excessively charitable in his statement today towards our EEC partners? It is quite clear from the bland communiqué that came out of Luxembourg that very little has been achieved. Furthermore, it is not likely that there will be any EEC unity in taking action against state-sponsored terrorism.

Sir Geoffrey Howe: I think that my hon. Friend needs to keep a balance in assessing these matters. Plainly, we would have wished for a firmer and more united response from our European partners at an earlier stage. Having said that, the range of measures on which agreement was reached at the meeting on Monday represents a significant advance. It represents a commitment by 12 member states of the European community to take action across the Community, which is manifestly producing a reaction in Libya itself.

Mr. David Steel: Do not the Americans have a legitimate complaint that we have been very slow in Europe in taking concerted action against Libyan-inspired terrorism? Does not the Foreign Secretary find it disturbing that even the sadly limited measures agreed yesterday had to follow in the wake of the American bombing raid? Will the Foreign Secretary remind the House of the terms of the Government's 1985 defence White Paper, which called for a more cohesive Europe operating on equal terms with the United States of America? If that is to be achieved, will he remind his right hon. Friend the Prime Minister that that must mean a greater unity of purpose in both economic and political issues with our European partners than has been generally shown by the Government so far?

Sir Geoffrey Howe: Although I am not prepared to accept the rebuke with which the right hon. Gentleman closed his question, I plainly endorse the need for more effective European co-operation. That is why this country promoted the political co-operation treaty which we are discussing later today. I entirely agree with the right hon. Gentleman. We have been in the van in pressing our European partners for collective effective action for some time. [Interruption.] The right hon. Member for Leeds, East (Mr. Healey) must stop his supine interjections.

Mr. Healey: rose—

Sir Geoffrey Howe: The right hon. Gentleman must remember that I am answering a question from another right hon. Gentleman, and even he does not have the right to intervene on that.
Two years ago, we had our experience with the Libyan people's bureau. Since that time, at international gatherings of the Seven, the Ten, or the Twelve of the Council of Europe we have been pressing for effective action. We got a plain agreement in January this year on, for example, a ban on arms sales and an urgent study of further steps—not enough. On Monday 14 April we pressed again for further action and got a commitment to three steps—not enough, but we were in the van the whole time. This Monday we got a commitment to the steps I have described in the House today. That is still not enough, but it is substantial progress; let us be thankful for it.

Mrs. Elaine Kellett-Bowman: Does my right hon and learned Friend accept that we are very pleased that, with his usual determination, he is making steady progress? Does he take comfort from the speech by Chancellor Kohl in the Bundestag stressing that Europe must act against terrorism? Does he believe that he is a substantial ally in this fight?

Sir Geoffrey Howe: I acknowledge with gratitude the tribute paid to me by my hon. Friend. It is reminiscent of one of my more fortunate school reports. I endorse what my hon. Friend has said. The Chancellor of the Federal Republic is giving substantial support for effective action. We must continue to press for it ourselves.

Mr. Roland Boyes: Did the Foreign Secretary emphasise to our friends in Europe yesterday, as strongly as the Prime Minister did to the House, that the Americans had a free right to choose which weapon systems were used in the attack on Libya? Did he


mention to our European colleagues that the Prime Minister did not deny that those aeroplanes could have carried nuclear weapons?

Sir Geoffrey Howe: That is a fanciful proposition. It is perfectly plain that the exchanges between the British Government and the United States Government laid down the nature of the targets that were permissible and laid down that the attacks should be undertaken in a fashion that limited collateral damage and civilian casualties on the ground. There was no question of any use of nuclear weapons. To introduce it into this context is fanciful and ridiculous.

Sir Peter Hordern: Will my right hon. and learned Friend confirm that exports of cheap food from the European Community to Libya have been banned? Will he admit that, in view of the way things have gone—he said that the measures did not go far enough—it is no surprise that the Americans took the action they did? Does he consider that the measures which he has just announced are too little and and too late?

Sir Geoffrey Howe: I have made it perfectly plain that the perception of this matter on both sides of the Atlantic was bound to be influenced by what was happening on the other side. Obviously, there was a connection between the slow reaction of the European Community to Libyan terrorism and the view taken by the United States. For that reason, I have pressed for a more effective response by Europe. As a result, we have been able to get a more effective answer than previously.
As to food surpluses, last week I raised with the Commission our concern about any action to authorise subsidies for dairy exports to Libya and other countries. My right hon. Friend the Prime Minister confirmed that to the House yesterday. The latest information I have from the Commission is that no further subsidised dairy sales are in prospect. There is no question of any special benefits or concessions for Libya alone.

Mr. George Robertson: What about beef?

Sir Geoffrey Howe: The beef may be from Scotland, and that would be of interest to the hon. Gentleman. He has a special insight into the problem. The choice of export destinations for produce such as beef and cereals is a matter for individual traders. Community export refunds are available for a wide range of destinations. The refunds are designed to bridge the gap between the local price and the world price. Libya has not benefited from any special treatment. The Commission is clear about our concern that that should not happen.

Dr. David Owen: In view of the German police investigations into the bombing of the disco in Berlin and the British police investigations into the E1 A1 incident, will the Foreign Secretary tell us, at the earliest possible opportunity, whether there is a link between Libya and the E1 A1 incident? If such a link is established, will action be taken by the European Community and other countries to stop flights into Libya as one of the least possible sanctions that must be taken if the European Community and others are to be taken seriously?
Will the Foreign Secretary take the opportunity to reply to a queston that was raised in debate, because the

Secretary of State for Defence said elsewhere that Britain did not agree to each specific target? The fact is that the Government did not appear to know or to question the Americans about the targets in Tripoli.

Sir Geoffrey Howe: On the last point, I can simply repeat what my right hon. Friend the Prime Minister told the House at the time. The clearest possible response was given to the United States about the nature of targets that could be involved—targets demonstrably connected with the promotion or control of terrorism. The attacks should be undertaken with the highest possible regard to the avoidance of casualties—civilian or otherwise—and collateral damage.
With regard to the right hon. Gentleman's first point, I am not in a position, at this stage, to say anything about the evidence that may or may not be given in connection with cases in Britain—that is sub judice. All I can say is that the police are pursuing their inquiries.
I recognise the important point that the right hon. Gentleman has made, but it would not be right for me to say anything further at this stage. I can appreciate that the plain identification of responsibility for an attack on airlines and airline safety would legitimately raise consideration of the question that the right hon. Gentleman has put.

Mr. Jonathan Aitken: Despite all this macho talk about vigorous action and an effective step forward, will my right hon. and learned Friend admit that all that the European Foreign Ministers have done is make a rather feeble attempt to half-shut the stable door after the F-111s have bolted?
As European policy now appears to be confined, in vigorous terms, to waving the Euroflag, will my right hon. and learned Friend admit that only a nation state and not the European Community can mount an effective and vigorous foreign and defence policy?

Sir Geoffrey Howe: No, I should have thought that the lesson to be drawn from these events is precisely the opposite. If each of the 12 nation states of Europe sought, independently, to take vigorous effective action, entirely of their own design, that would be far less effective than the 12 nation states taking effective collective action.
I have made plain the extent to which we would have preferred stronger action at an earlier stage. If we have effective implementation of these measures they will certainly have an impact on the threats against which they are directed.

Mr. Kevin Barron: Did any of the European Foreign Ministers tell the Secretary of State exactly why none of them supported Britain's involvement in the Libyan bombings?

Sir Geoffrey Howe: That question was not raised, because it was quite clear that there was a widespread understanding of the ways in which different countries have reacted to what took place. Their concern was far more constructive and sensible—namely, what further action could and should be taken by the member states to diminish and eliminate the threat of terrorism.

Mr. Teddy Taylor: Will the Foreign Secretary continue to press the EEC not to spend a great deal of money on offering the same subsidies for food dumping to Libya as it does, for example, to India and Pakistan? Did the Secretary of State thank the


representative of the Spanish Government for the fact that, although we are not able to buy Australian or South African sherry because of Spanish opposition, they have given us permission to continue to sell British sherry in Britain for another 10 years?

Sir Geoffrey Howe: I do not recollect any recent discussions with my Spanish colleague or anybody else about the outstanding qualities of British sherry. The disposal of Community food surpluses takes place on world markets with the benefit of export subsidies. We are concerned to secure reform of the common agricultural policy because so much of the money is directed to either storage or disposal of food surpluses.

Mr. Andrew Faulds: Did his European colleagues try to establish from the Foreign Secretary whether his version or the Prime Minister's version is the correct one as to when he first knew of the decision to attack Libya from British bases?

Sir Geoffrey Howe: There is and has been no mystery. My European colleagues have expressed no curiosity. The Prime Minister told the House in her first statement last week that we heard of a tentative decision, in principle, from the President before the weekend. There were discussion between the President's representatives, the Prime Minister, and the heads or Foreign Ministers of a number of European countries during the weekend, of which I was fully informed on my return from Germany.
On the Monday, as my right hon. Friend the Prime Minister said yesterday, no Foreign Minister present at the meeting of the European Foreign Ministers had any knowledge that a final decision had been taken or of its nature and timing.

Mr. Nicholas Budgen: Will my right hon. and learned Friend confirm the report in yesterday's Irish Times that Mr. Barry and the Irish Government intend to ensure that cheap EEC food should continue to go to Libya? Will my right hon. and learned Friend explain today how it is possible that the EEC can have some form of foreign policy when it is based on so many different and divergent traditions and interests?

Sir Geoffrey Howe: The answer to that is to be found in my statement. The 12 European Community states have agreed on substantial common action. One cannot expect, even if one wanted it, an entire foreign policy to spring into existence overnight. It is a far more effective to have 12 member states acting together—

Mr. Budgen: But they do not.

Sir Geoffrey Howe: —instead of acting separately. I am afraid that I do not study The Irish Times with the same assiduity as my hon. Friend, but I heard nothing from the Irish Foreign Minister on Monday to suggest that Ireland is other than as deeply concerned as we are at the link between state-sponsored terrorism and the IRA. There was no suggestion whatever of their wanting to give any comfort to Libyan state-directed terrorism.

Several Hon. Members: rose—

Mr. Speaker: Order. I shall do my best to call those hon. Members who have been rising, but I ask for brief questions.

Mr. David Winnick: Did the other EEC Foreign Ministers know of the widespread opposition

in Britain to the bombing raids and the use of bases here? Why should the innocent be slaughtered because of the crimes of the guilty? Is the Foreign Secretary aware that he would have served his country far better if he had stood up to the Prime Minister last week and made it clear that it was folly to carry out the bombing raids and for bases here to be used for such purposes?

Sir Geoffrey Howe: The hon. Gentleman is characteristically, ranging over a wide area that the House has already covered. The Prime Minister, I and the other colleagues concerned were all committed to our decision. There was no question of anybody standing up to anyone else. Nor was there any question of my colleagues in the Community pressing me with criticism of what had been said and done. Of course they knew that opinions such as those expressed by the hon. Gentleman had been expressed in the House. They also knew that the Government had a substantial majority in the following debate. Nobody who has been connected with this matter can be unaware of the death and injury to innocent people. We have all made plain that we deeply regret that factor. It is not possible, however, in today's world to take effective action in defence of the innocent citizens of this and other communities who are killed by terrorist action and to guarantee that they will not be killed or injured, by such action.

Mr. Robert Adley: Could we look a little more closely at the use of my right hon. and learned Friend's phrase "state terrorism"? Does my right hon. and learned Friend agree that the phrase is most appropriately applied to countries that have invaded and occupied neighbouring countries in defiance of United Nations resolutions, such as the Soviet Union of Afghanistan, Vietnam of Kampuchea and Israel of Jordan, the Lebanon, Syria and Egypt? Does my right hon. and learned Friend agree that American foreign policy—

Mr. Speaker: Order. The hon. Gentleman is getting wide of the EEC meeting.

Mr. Adley: I was going to ask whether my right hon. and learned Friend agrees that the Venice declaration produced by the European Community was the most constructive proposal that has yet emerged to solve the Palestinian problem, which lies at the root of middle eastern terrorism? What is being done to regenerate it?

Sir Geoffrey Howe: I agree with the central point on which my hon. Friend closed his wide-ranging question and I agree with him about the importance of trying to inject new life into that approach.

Mr. Eric Deakins: Is not the best way in which to eradicate terrorism to remove its cause? Does that not mean tackling the problem of the Palestinians and Jerusalem? What measures does the right hon. and learned Gentleman propose to take with his American colleagues—

Mr. Speaker: Order. We are again running wide of the statement.

Mr. Deakins: I should just like to ask what further steps with the United States are being proposed to resolve these problems in the middle east.

Sir Geoffrey Howe: I am anxious not to get drawn into a wide-ranging discussion of this question. I agree with the hon. Gentleman about the importance of the central


question. However, it must be acknowledged that one of the problems we face, which was made clear in the discussions last week with His Majesty King Hussein, is that of securing sufficiently effective representative Arab unity to enable the dialogue to be advanced as we all wish. However, I shall not be drawn further than that.

Mr. John Watts: Is my right hon. and learned Friend aware that, despite the measures that were agreed upon earlier this week, many hon. Members and many people outside Parliament consider that the response of our European partners has been woefully inadequate? I welcome my right hon. and learned Friend's determination to continue to try to put some backbone into our European partners, but can he assure the House that the failure to reach agreement in Europe will not be a constraint upon further effective measures by this country, and that such measures could and should include the severing of all transport links with Libya and the exclusion of all Libyan nationals from our territory save those who qualify for political asylum?

Sir Geoffrey Howe: The points raised by my hon. Friend go rather further than anything that has yet been suggested. We must bear in mind that our argument is not with the entire Libyan people but with the regime that is responsible for the direction of Libyan state-supported terrorism. In that context, we are prepared to take whatever action is necessary to ensure the security of this country, as evidenced by the action that was announced yesterday by my right hon. Friend the Home Secretary. As for the Community, our actions and our own willingness to take far-reaching action two years ago, and again in the last fortnight, shows that of course we are prepared to take such action nationally as we think right, but equally I shall use the arguments of my hon. Friend and other hon. Members in supporting the case for more effective and widespread action in the Community.

Mr. Ron Brown: The House has yet to see the evidence that justified the murder of innocent Libyan people. Today I was informed by Salaheddin Msallm, the official who represents the Libyan Government, that he had been banned by the British Government from making any public comment about all these issues. Could it be that this Government, who allegedly proclaim their belief in free speech, are frightened of the truth coming out about this sad, sordid affair? There have been no reprisals against the British community in Libya. They have been well protected and well cared for. They are part of a counry that recognises their worth. Whether this Government recognise their worth is another matter, bearing in mind the danger from bombing that threatens not only the lives of Libyans but also the lives of British citizens.

Sir Geoffrey Howe: It is difficult to approach such a long question that has been posed from such a different perspective from that of most of the rest of the House. However, the hon. Gentleman must understand that the House is concerned about whether or not effective action can be taken against a deliberate and sustained series of attacks on innocent people by terrorist means. In that context, I do not believe that our record on freedom of speech can sensibly be compared with that of the Libyan

regime, which today has proposed the expulsion of 250 Community and European journalists, either in retaliation or for some other reason. The hon. Gentleman ought to be pointing his gun in the opposite direction.

Mr. Anthony Beaumont-Dark: Did my right hon. and learned Friend have the chance to stress to our European friends, particularly the weak-kneed French, that the Western Alliance and NATO would not last a week without the backing of the United States and the force that it can bring to bear? If we are to be isolated, is it not best to be isolated with our friends rather than with our enemies? If the allies continue to deny to America the right to defend its people throughout the world, we shall end up with America becoming isolationist again. That would damage the interests of the free world, possibly for years to come.

Sir Geoffrey Howe: I entirely understand the importance of my hon. Friend's point. I have tried to point out, both within Europe and across the Atlantic, the importance of both pillars of the Alliance taking full account of each other's opinions and sensitivities. It is of the utmost importance that we should not allow Colonel Gaddafi to achieve within the Alliance what Moscow has been unable to achieve.

Mr. Tam Dalyell: Albeit there was no knowledge of a final decision, will the Foreign Secretary spell out what he meant in answer to my right hon. Friend the Member for Leeds, East (Mr. Healey) when he referred to "separate considerations and separate circumstances"? If we are a Community, there is surely a certain candour between Foreign Ministers. The French, having been asked for the use of air space, must have known what the proposition was. Why was there no discussion among the partners—albeit the circumstances were not, apparently, appropriate, according to the Foreign Secretary—on this vital, urgent issue? Why was it that the Secretary of State for Defence was left in ignorance until Monday 14 April? Will the Foreign Secretary answer the question that was eloquently put by Field Marshal Lord Carver in another place: who was consulted, and who agreed?

Sir Geoffrey Howe: I have been trying to answer questions eloquently put in this place rather than those put in another place. The story has been plainly outlined. I have explained that the Prime Minister, myself, the Secretary of State for Defence and other colleagues were consulted in the first week. The Overseas and Defence Committee was convened on the—

Mr. Dalyell: Did the Foreign Secretary say that the Secretary of State for Defence was consulted?

Sir Geoffrey Howe: That has been public knowledge for a long time. The knowledge of the Secretary of State for Defence, the Prime Minister and myself on the Monday was precisely the same until we heard—

Mr. Dalyell: But on Scottish radio he was for stopping attacks.

Sir Geoffrey Howe: Our knowledge was the same, on the basis of the consultations that took place during the weekend. The knowledge of a number of other European countries was on the basis of similar consultations, but not all of them. But none of us received news of any final decision that had been taken about what and when, until late on the Monday.

Mr. Bill Walker: Does my right hon. and learned Friend agree that it comes ill from the Opposition to be critical of United States weapons, equipment and other factors that were used in the raid on Libya, because when they were in office their idea of deterrence in the middle east—

Mr. Speaker: Order. The hon. Member is asking a question that goes wide of the statement.

Mr. Walker: It refers to questions that were asked by the Opposition Front Bench.

Mr. Speaker: Order. The hon. Member should be asking a question of the Foreign Secretary.

Mr. Walker: The European action was helped, but when the Opposition were in office it was not helped. Their idea of deterrence in the middle east was to order the Royal Force into action in battle zones unarmed. Their idea of—

Mr. Speaker: Order. The hon. Gentleman could get his question in if he were a little more sophisticated about it.

Mr. Walker: The Opposition's idea of effective deterrence was the ineffective Beira patrol.

Sir Geoffrey Howe: I do not think that I sufficiently follow the inwardness of that question to be able to answer it.

Mr. Dennis Skinner: Is the Foreign Secretary aware that the British people will have noticed in the measures that he has announced today that there is no reference to the possibility of banks and other commercial institutions being affected in any way whatsoever? Is that not best exemplified by the fact that this Government refuse to take part in any exercises that result in a loss of profit for their friends in the City, although the Prime Minister is prepared, on a nod and a wink, to say to President Reagan, "Go ahead, you can cause loss of life?"

Sir Geoffrey Howe: No, the hon. Gentleman has it absolutely wrong.

Mr. Peter Bruinvels: Is my right hon. and learned Friend able to evaluate the number of Libyan nationals to be expelled throughout the EEC? Does he share the concern of many people in this country that not a lot, and not enough, have been expelled so far? Will he confirm that security at Rome and Athens airports was looked at, bearing in mind that terrorist activity has taken place at both of them?

Sir Geoffrey Howe: The specific incidents at Rome and Athens airports take us back some way in time. However, I know that at that time, and subsequently, much closer consideration was given to security at those airports. The intensification of airport security is one of the matters upon which agreement was reached last Monday. It was agreed that airport security should be the subject of urgent study by the Community's transport ministers. The best point to make about expulsions is that, as a result of the intensely strict visa regime that has been applied by this Government in the last two years to Libyans, the number of Libyans being admitted to this country including students has been reduced to about 10 per cent. of what it was previously.

Mr. John Evans: Did any EEC country with American bases say that it was willing to allow them to be used in the event of a further American attack upon Libya? Was there not a very curious contradiction in the latter part of the Foreign Secretary's statement? He announced that we are on the brink of a trade war between the EEC and the United States of America, but there was no announcement of a trade war between the EEC and Libya. On the contrary, we are continuing to supply cheap foodstuffs to Libya, to which the Americans, quite rightly, object.

Sir Geoffrey Howe: The first question did not arise. The second question is a completely false parallel In the course of the action and counter-action being taken in relation to trade by the Community countries and the United States, both sides contemplate the imposition of retaliatory sanctions if, but only if, negotiations under article xxiv.6 are not successful.

Mr. Tony Marlow: What institutional initiatives are Her Majesty's Government taking so that in future cheap European food is not used to strengthen those regimes that we would wish to weaken? Will my right hon. Friend take it from the Conservative Benches that there is nothing quite as supine as the IMF doormat on the Opposition Front Bench?

Sir Geoffrey Howe: I am always glad to endorse, even from my hon. Friend a valid judgment of the right hon. Member for Leeds, East (Mr. Healey). The broader question must in essence be looked at in the context of the case for and against economic sanctions and in the context of the sustained action that is necessary to reduce the volume of subsidised exports for disposal.

Mr. Tony Banks: In the discussions between representatives of the American Government and the Prime Minister about targets to be bombed in Libya, did the Americans at any stage say that one of their objectives was the killing of Colonel Gaddafi?

Sir Geoffrey Howe: As my right hon. Friend told the House, we set strict criteria for the use of those aircraft based in the United Kingdom. They were to be directed against
clearly defined targets related to terrorism"—[Official Report, 15 April 1986; Vol. 95, c. 729.]
and every effort would be made to minimise collateral damage. The operation arrangements were within those criteria.

Mr. Richard Hickmet: Did my right hon. and learned Friend remind his opposite numbers of the growing disenchantment in the United States at the European attitude, and in particular of the importance of the NATO Alliance? did he draw to their attention the damage that would have been done to the Alliance had not the United Kingdom supported the American action last week? In those circumstances, did he call upon his opposite numbers to take more effective and constructive action to deal with state-sponsored terrorism?

Sir Geoffrey Howe: That is precisely the point that I have already made in answer to my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont Dark). I have made plain to the United States and our European partners our concern for effective united action


within the Alliance. If either side is heedless of the interests or concerns of the other side, that poses a risk to the Alliance.

Mr. Healey: Can the Foreign Secretary confirm the statement of the Secretary of State for Defence on the "Today" programme this morning that Her Majesty's Government have the right to refuse permission for the use of the RAF bases on which American aircraft are based in Britain for the delivery of nuclear weapons against the Soviet Union, but has only the right of consultation on the use of those bases against countries with which NATO is not in dispute? That is exactly the opposite of what a former Conservative Prime Minister told the House in the debate last week. Secondly, will he inform the Secretary of State for Defence that those bases are RAF bases, not American bases?

Sir Geoffrey Howe: Plainly, they are RAF bases. Equally plainly, the whole basis of agreement rests on the Churchill-Truman understanding—

Mr. Healey: Answer the question.

Sir Geoffrey Howe: I am coming to that, if the right hon. Gentleman could contain his supine self for a second.
That 1952 agreement reaffirmed that the use of those bases in an emergency would be a matter for a joint decision by Her Majesty's Government, and under that arrangement either party can withhold agreement until it is satisfied on any point.

Mr. Healey: rose—

Mr. Speaker: No, I think—

Mr. Healey: May I intervene for a moment as Pithecanthropus Erectus?

Mr. Speaker: Order. The right hon. Gentleman has had two bites.

References to Members

Mr. Harry Greenway: On a point of order, Mr. Speaker. May I seek your guidance and information on the courtesies of the House? The Opposition spokesman on transport, the hon. Member for Wigan (Mr. Stott), made an erroneous and ineffective attack upon me in the House at the beginning of the debate on transport yesterday without informing me in advance that he would refer to remarks that I had made. I have today told him that I shall be referring to him in the House and I invited him to be in his place to hear me do so.
If an hon. Member intends to refer to another hon. Member, is it not customary to give notice of that so that that hon. Member has the right to reply, should he wish to exercise it? Therefore, was the hon. Gentleman not yesterday grossly discourteous to the House and to me?

Mr. Speaker: I have looked at this matter because the hon. Gentleman raised it with me beforehand. It was not a serious attack, but I confirm that if a right hon. or hon. Member is to be mentioned in a debate, it is our courtesy that he is informed in advance.

Company Political Donations (Government Contractors)

Mr. Austin Mitchell: I beg to move,
That leave be given to bring in a Bill to prohibit companies which contract with the Government, or any department or agency thereof or any local government authority, from making donations, gifts or contributions either directly or in conjunction with any other company, association, or body or otherwise indirectly to any political party or to any candidate for Parliament.
The Bill deals with the murky, obscure and rather difficult subject of party finances and political contributions. It is part of a consistent plea by Labour Members and something that we shall implement when we return to power. It is a plea, first, for light, more light and still more light. Let us know what is happening in this area and let us know who is giving what to whom and why. Secondly, it is a plea for more democracy in political donations so that people do not find that companies are giving money on their behalf without their consent, with no power for them to opt out and without any real consultation on their views.
Ideally, political parties—this is a widely-held view—should be financed by the state, but until that happy day comes the very least that we can do is establish these two basic principles to dissipate the air of sleaze and scandal and the possibility of undue and unreasonable influence and of wrong deals which is all too prevalent today.
My Bill is part of that process and it is much the simplest part of the process because it provides, simply and straightforwardly, that public contractors—those working on or bidding for contracts with central Government, local government or public bodies—shall not make political donations to any party and shall not be considered for contracts if they make political donations to any party. That is a simple principle and it is one that is firmly established by law already in that great bastion of free enterprise, the United States, where federal legislation provides accordingly. My Bill is intended to follow that federal legislation in the United States.
I shall not unveil any great scandals, which is perhaps why the Press Gallery has emptied already, but it is wrong that, for example, Sir Horace Cutler, as Conservative leader of the GLC, set up in 1977 and again in 1981 his own political fund—Sir Horace was trying to be a mini-Lloyd George for beginners—which raised £22,000 in 1977 and £20,000 in 1981, and which was apparently mainly financed by builders with contracts with the GLC. Indeed, Wates gave £3,000 to the first of those funds, which was not reported in its accounts through the normal procedures. Some of the firms giving money to that fund—McAlpine, for instance—asked that restrictions be placed on the GLC's direct labour department as a price for those contributions. That is wrong.
It is also wrong that firms such as Trust House Forte, which has cleaning interests and donates £37,500 to the Tory election fund, and Pritchard, which gave £10,000 in 1982, £5,000 in 1983 and £12,000 in 1984, should be giving money to encourage Government to privatise cleaning contracts, particularly for the DHSS, but also for local councils. Indeed, that has often been done with disastrous results.
The National Union of Public Employees privatisation fact sheet, which appears regularly, devotes nine pages of the latest issue to faults, failures, inadequacies and lawsuits arising from hospital and local government cleaning contracts undertaken by firms, many of them donors to the Conservative party, as a result of privatisation, which their donations were presumably meant to encourage.
That principle is completely wrong. It is also wrong that defence contractors should make donations, especially because the area for competition in defence contracts is very limited. Even so, Plessey has donated £55,000 and Racal has donated £75,000. Even poor Westland donated £2,000 to the Conservative party. That may be a small donation in view of the company's financial position. Indeed, in view of the way that the company was treated by the Government, I would have expected the Government to give money to Westland rather than the company giving money to the Government.
It is also wrong that the principle of donations should apply in the new area of privatisation as we do not know what rules will govern contracts in that area. It is significant that half of the financial advisers and lead underwriters to the Government's privatisation programme are donors to the Conservative party or to its backing group, the Economic League. Kleinwort, Benson donated £30,000 to those organisations. It will not escape the attention of hon. Members that Kleinwort, Benson did very well out of the flotation of British Telecom, and many of the advisers did well out of that and other flotations.
As long as there are donations of this nature, there will always be the imputation that influence is being used, that favours are being sought and given or that contracts are being influenced. It is significant that construction is the fourth largest donor to the Conservative party. We do not know whether there are scandals in that area. However, there have been major scandals overseas, especially in Canada, over Government contracts for construction firms. It is important that we know what is happening and that justice is not only done but seen to be done. The Bill, plus the publication of company donations, will ensure that that is done.
The bulk of the contributions that we are discussing today will go to the Conservative party. That party has seen the justice of legislating to ensure publication of donations and to ensure full consent for donations made to the Labour party by trade unions. The Conservatives must therefore see the justice of establishing the same principle in the case of the even larger donations made to the Conservative party. There cannot be one law for the poor and one for the rich in this instance.
I do not know why people contribute to the Conservative party. They certainly cannot do that to get the benefits of the Government's economic policies which have brought disaster for so many firms, record rates of bankruptcies and closures and such record under-running in capacity. They cannot be contributing to secure honours because the Government assure us that that is not the case. The Government are honourable and I am sure that they would not lie, especially when they can use a carefully lawyered and cunningly phrased half-truth instead.
The donations must be made in the hope of gain. Donations are being made in the hope of gaining tax cuts for the substantially wealthy, the gain of Government contracts for City firms, cleaning firms and others. It is therefore vital that we establish the principle that these


donations should not be made by firms which are bidding for Government contracts as there is a possibility of corruption. We have a responsibility to act against that possibility, and my Bill provides the way to achieve that.

Question put and agreed to.

Bill ordered to be brought in by Mr. Austin Mitchell, Mr. Terry Davis, Mr. Frank Dobson, Mr. Mark Fisher, Mr. Michael Meadowcroft, Mr. Nick Raynsford, and Mr. David Winnick.

COMPANY POLITICAL DONATIONS (GOVERNMENT CONTRACTORS)

Mr. Austin Mitchell accordingly presented a Bill to prohibit companies which contract with the Government, or any department or agency thereof or any local government authority, from making donations, gifts or contributions either directly or in conjunction with any other company, association, or body or otherwise indirectly to any political party or to any candidate for Parliament: And the same was read the First time; and ordered to be read a Second time upon Friday next and to be printed. [Bill 141.]

Orders of the Day — European Communities (Amendment) Bill

Order for Second Reading read.

The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): I beg to move, That the Bill be now read a Second time, and that this House take note of the White Paper "Developments in the European Community July-December 1985" (Cmnd. 9761).

Mr. Speaker: Before we proceed with this important debate, I must announce to the House that I have not selected either of the amendments on the Order Paper. It will, of course, be in order to advance the arguments set out in those amendments in the course of the debate. I must also tell the House that many right hon. and hon. Members wish to take part in the debate. If necessary, I will introduce the 10 minute limit on speeches between 7 pm and 8.50 pm

Sir Geoffrey Howe: We have thought it right to include within the scope of the debate the latest White Paper "Developments in the Community."
The six months in question was, of course, dominated by the conference, whose outcome is the subject of the Bill now before the House. However, during that six months we also received the first of the abatements due to us under the Fontainebleau agreement. The Commission published its proposals for reform of the common agricultural policy, which emphasise the need for policies that we have long advocated, including sustained action on prices to bring about a better balance between supply and demand. [Interruption.] In a situation of serious overproduction worldwide—

Mr. Speaker: Order. I sense that the House is slightly confused by the Foreign Secretary's opening comments. He is moving the Second Reading of the Bill and not asking the House to take note of the White Paper.

Sir Geoffrey Howe: That is correct. I was simply stressing that it will be essential in this context to persist with the reforms initiated over the past few years, and for similar action to be undertaken in a number of other countries outside the Community.
The Bill will give effect in United Kingdom law to the changes to the treaties establishing the European Communities, which were agreed by the Prime Minister and other European Community Heads of Government in Luxembourg last December. That agreement is contained in the Single European Act, which was signed on behalf of the United Kingdom by my hon. Friend the Member for Wallasey (Mrs. Chalker), the Minister of State, on 17 February. That Act embodies not only those agreed changes but also the new, specific treaty provisions on political co-operation that were introduced at the initiative of the United Kingdom.
I would like first of all to describe the Bill and then the Single European Act and its implications for the United Kingdom. The Single European Act involves changes in Community law. The main purpose of the European


Communities (Amendment) Bill is to give effect to those changes as part of Community law applicable in the United Kingdom. The principal vehicle for that is clause 1, under which the relevant part of the Single European Act becomes a Community treaty within the meaning of the European Communities Act 1972.
Clause 2 covers the agreement by Heads of Government to attach a new court of first instance to the European Court of Justice. There is no question of extending the powers of the court to new areas. The court of first instance will simply provide for the more efficient disposal of the court's growing workload. This is a much needed improvement. The Bill will ensure that decisions of the new court of first instance will be given effect in United Kingdom law.
Clause 3 provides for the change in title of the European Assembly, which will formally be known as the European Parliament once the Single European Act enters into force. In this country it has already for some time been the practice of successive Governments to use the term European Parliament in all but formal legal documents. It is the term that was used by all the major parties in their manifestos for the direct elections to the Parliament in 1984 and indeed in all their manifestos in the 1983 general election as well. So clause 3 brings the law into line with well-established practice.

Mr. Tony Marlow: I may be wrong, but am I not right to believe that a Parliament is a legislature that can make laws and that the Assembly at present cannot make laws and is therefore not a legislature? Would it not be more appropriate to call it an Assembly unless we wish to give it powers to make laws? If we do that, will we reduce the powers of this House?

Sir Geoffrey Howe: I do not think that we can confine the definition of a Parliament to a specific function. The fact is that nearly all hon. Members and in the country have talked about the European Parliament for many years.

Mr. J. Enoch Powell: Not all of us.

Sir Geoffrey Howe: Of course there are one or two dissenters but the reality is that all the major parties, as I have said, spoke about the European Parliament at the last elections. I know that my hon. Friend the Member for Northampton, North (Mr. Marlow) retains a long-standing affection for the alternative phrase and he is likely to continue to use that phrase. However, we are now bringing official practice and official designation into line with well-established practice and that should be the end of that question.
Clause 3 also includes provision for the approval of a Single European Act for the purposes of section 6(1) of the European Assembly Elections Act 1978. I shall explain the purpose of these provisions when I come to describe the changes in the role of the Parliament that were agreed at Luxembourg.
Clause 4 contains the short title and consequent repeals.
So much for the Bill. I shall now tell the House something about the impact of the Single European Act. First, I shall deal with EC treaties and, secondly, with cooperation in foreign policy among the Twelve.
The main changes to the EC treaty fall into three groups. The first group updates it to include specific reference to, and an agreed basis for, long-established

areas of Community activity which have been conducted so far as a piecemeal basis: notably research and technological development and environment. The second group introduces a carefully considered co-operation procedure involving the Council, the Commission and the European Parliament. Most important of all is the introduction of a commitment and timetable for completion of the common or internal market as one of the principal goals of the treaty and a long-standing aim of successive British Governments.
The Community has, of course, made real progress towards the completion of a common market in goods and services. The first part of that—abolishing tariff barriers to trade—was relatively easy. The second part—breaking down non-tariff barriers—has proved more difficult. As the House knows well, these barriers take many forms. They include technical standards for industrial products, which mean that in practice only the domestic product can be sold in its own market. They include barriers to services, including rules such as those which currently apply in some member states prohibiting their citizens buying insurance from anywhere outside their domestic markets.
There are barriers to the exercise of the professions, some of which we have already succeeded in dismantling—for example, the agreements that we reached on architects and pharmacists last year. They include numerous impediments to a liberal transport policy. Among these are the provisions for quota restrictions on lorry movements between one Community country and another which inhibit free competition. Another example is the cartel arrangements which still apply to air travel.
The implications of the completion of the internal market for Britain can be put in three ways. First, we must think about the implications of not achieving a common market.

Sir Russell Johnston: The Secretary of State for Foreign and Commonwealth Affairs did not mention that the agreement that was reached on architects took 17 years to complete. He did not mention either whether the Single Act will have any effect on health regulations, for example, which are used as a form of non-tariff barrier.

Sir Geoffrey Howe: I shall deal with health regulations in a moment. The hon. Gentleman is right to point out that progress on non-tariff barrier restrictions on the single market has been lamentably slow. That is one of the reasons for the changes which are now being proposed for moving in the areas which I shall define, from unanimity to majority voting. I was merely pointing out that we have made some progress, and I have given two examples. Of course, we want to make more progress. As I have said, the implications of not having a common market would remain serious.
We are a nation that already sends 48 per cent. of its exports to members of the European Community and Britain needs to have completely free access to those markets. We need to ensure that that free access is mutual so that benefits enjoyed by trade and services coming to this country can be enjoyed by our exporters elsewhere. That applies especially to the services sector and to certain areas of transport such as maritime shipping. That is why the views of British industry are so plainly in support of the commitment to the early establishment of the common


market. All the major organisations such as the CBI, the Institute of Directors, the British Institute of Management and the Association of British Chambers of Commerce have long campaigned for the completion of the internal market.
Thirdly, there are benefits for our citizens. By deregulating coach services in Britain six years ago, for example, we have achieved a 50 per cent. increase in passengers, a 20 per cent. increase in services and a decrease in fares in real terms of up to 40 per cent. The benefits are obvious to service operators and consumers and to manufacturers as well. This is because an expansion of economic activity is taking place. How much more obvious the benefits would be if that could be achieved on a European scale.
My second example is air transport. Thanks to our persistent efforts we have succeeded in reaching bilateral agreements with the Netherlands and Germany. We are currently negotiating an agreement with Denmark. The agreement and arrangements between the United Kingdom and the Netherlands have led already to a drop in the cheapest air fare from £82 to £49 and an increase of 16 per cent. in air traffic between the two countries—70,000 extra passengers and 10 new services in the first year. Once again, how much more effective it would be if we could make similar progress throughout the Community.
Thus far the remaining obstacles to the completion of the internal market have been largely political. That underlines the importance of the success that we have achieved in getting completion of the internal market at the top of the Community's agenda.

Mr. Teddy Taylor: Is it not the case that air fares for travel from the United Kingdom to the United States have reduced substantially and rather more dramatically than air fares from the United Kingdom to Europe? Is it not possible to achieve what my right hon. and learned Friend is talking about without having a common market, without having the Treaty of Rome, without having a Single European Act and without having all the excessive bureaucracy that is involved in maintaining that structure?

Sir Geoffrey Howe: It is possible to achieve deregulation between two countries. I have explained that that has been achieved between ourselves and the Netherlands. The effect of a Community framework would be to apply a general policy of liberalisation, and that has been considered by the Community for some time. It is the habit and practice of working together on a Community basis that is more likely to promote the achievement of agreements than working under a series of bilateral arrangments. I see no argument against what we are trying to do. Indeed, the contrary is the case.
It is important that we have succeeded in putting completion of the internal market at the top of the Community's agenda but institutional problems have been tackled as well, such as the requirement—this takes up the issue raised by the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston)—that measures to complete the internal market can be taken only by unanimity under article 100 of the treaty. That is one of the institutional problems that we have been addressing.
When we came to discuss the possibility of a treaty change a general agreement developed that, where

political determination could be reinforced and facilitated, that should be done by making carefully balanced changes in the Community treaty. In the Single European Act these changes take two main forms. First, there is a definition of the internal market and a commitment to its completion by 1992. Secondly, there is the provision that in most of the internal market areas that have so far been subject to unanimity majority voting should apply.
Once the changes have been ratified in all member states, with some exceptions that I shall describe, qualified majority will replace unanimity for the measures which are major components of the construction of the common market. These are policies for sea and air transport, for the right to provide services freely in another member state and for the agreement of common standards that are the key to export growth.
These are potentially important changes but at the same time their scope is not indefinite. It was recognised that some subjects were of such importance to the national policies of individual member states that they should remain subject to unanimity voting. The three principal topics for which unanimity is retained are tax measures, measures relating to the free movement of individuals and measures affecting the rights and interests of employed persons.
For Britain and Ireland, among others, perhaps, there was an additional need reflecting our position as island countries with special requirements in terms of human, animal and plant health. Our position is protected in that respect by an additional safeguard that will permit us to retain or take national measures on the ground of significant need, notably where health, safety, environment and consumer protection are involved. That is not intended to extend to the preservation of measures of the sort for which there can be no justification on that ground.
I know that there are some who will be anxious that in promoting the achievement of an internal market in this way we may diminish the essential protection of our national interest that is inherent in the requirement for unanimity. I would not accept that: first, because we have got the safeguards that I have described, which protect us on the key issues; secondly, because it will be open to us to combine with other member states to form a blocking minority; and, thirdly, because, as a last resort, the Luxembourg compromise remains in place untouched and unaffected. When I say the last resort, I mean it, because I strongly believe that it will benefit this country more for progress to be made towards completion of the internal market through the introduction of qualified majority voting than for progress to remain blocked, as it often has been in the past, by one member state alone.

Mr. John Browne: With regard to the Luxembourg compromise, could my right hon. and learned Friend explain to the House why it was that on the one occasion that I know of that this country tried to use its rights under that compromise we were not allowed to do so?

Sir Geoffrey Howe: It was because, as the House well knows, the Luxembourg compromise is not a provision of the treaty; it is a component of political reality in the Community. We were outvoted on the occasion in 1982 because other member states argued that our invocation of that proposition was unrelated to the matter in hand; in other words, we were seeking to invoke it in a wider area


unconnected with the point on which the discussion was taking place. That was the position in 1982. That argument would remain available in today's circumstances. The one thing that is clear is that the Luxembourg compromise as I have described it is in no way affected one way or the other by the Single European Act.

Mr. Marlow: My right hon. and learned Friend will know that there is a short sentence in the Single European Act referring to these measures which says:
The Commission, in its proposals … concerning health, safety, environmental protection and consumer protection, will take as a base a high level of protection.
Is this not likely to have two effects which we can do very little about? One is that if there is a socialistic majority on the other side of the Channel we shall have all sorts of socialism rammed down our throats. The second is that, if a lot of European industries gang up together to set conditions which are to their advantage and to the disadvantage of British industries, there will be nothing that we can do about it.

Sir Geoffrey Howe: The provisions will still be governed by decisions taken under the qualified majority proposals described in the changes being made and will be subject in the same way to the Luxembourg compromise unchanged by anything in these provisions. I really do believe that it will benefit this country more for us to be making progress towards completion of the internal market through the use of qualified majority voting than for that progress to remain blocked, as it has often been in the past, as the hon. Member for Inverness, Nairn and Lochaber pointed out, by one member state alone.

Mr. Teddy Taylor: On the desperately important point raised by my hon. Friend the Member for Winchester (Mr. Browne), is the Foreign Secretary saying that the only time that we tried to use the Luxembourg compromise in recent years, in 1982, it did not work and that the only safeguard we have, the Luxembourg compromise, can be used only if the majority of other member states agree with us that it is of supreme national interest for our country? Does not that mean that the Luxembourg compromise is no real protection at all?

Sir Geoffrey Howe: The Luxembourg compromise is not set out in the treaty and is not, therefore, provided for with the precision that would appeal to my hon. Friend, but the nature of it is unchanged by the proceedings which we are now considering.
The Luxembourg compromise, as many hon. Members have said, has cast its shadow over many considerations and has deferred the reaching of decisions in many circumstances; it has upheld our national interest and that of many other countries, so that people have recognised that it was the weapon that could be exercised in the last resort. That reality remains. I will give just one example. We had a very important package last year of 15 industrial standards directives which had been agreed in 1984 and had been held up by one member state and then another in isolation for over 12 months.
The other major changes in the treaty incorporated in the Single European Act are those which involve longstanding areas of co-operation which so far have not been formally reflected in the treaty itself. The first is cooperation in research and technological development. That activity has been taking place in the context of meetings of Research Ministers since 1975.

Mr. Tam Dalyell: On the question of the European initiative on cancer research, would it be fair to say that this has been rather disappointing so far? What are the various countries of the Community going to do to fulfil the hopes of co-operation in cancer research that the right hon. and learned Gentleman put forward six months ago?

Sir Geoffrey Howe: I am not able instantly to tell the hon. Gentleman the position on that, but it is being considered by ministerial colleagues. My hon. Friend will no doubt have an opportunity of dealing with it in her reply.
The other area of change, apart from that of research and development, is in the treaty amendments governing the environment. Again, the Community has had environmental action programmes since July 1973 and there are already a number of directives in the environment field. That activity is now being codified.
I come next to the role of the European Parliament, because this is a topic to which a great deal of attention has been given.
A lot of attention was given to the role of the Parliament in the debate on 5 March and in particular to the so-called co-operation procedure, which was very fully and expertly described in the report prepared for that debate by the Select Committee on European Legislation. As hon. Members will know, the European Parliament already has the right to be consulted under some 17 articles of the treaty. The Single European Act provides that for 10 articles, including some new ones, that procedure will be changed.
The new co-operation procedure is designed to enable the Parliament to make its views known, and for the Council to take account of them, before positions have become set in concrete. Under the 10 articles to which I referred—mainly measures affecting the internal market—when a proposal goes to the Council, the Council will have a discussion on it and adopt a common position. Thereafter, if the Parliament, by an absolute majority of all its members, votes for amendments to that proposal, both Council and Commission will have to take account of those amendments.
Where the Commission agrees to change its proposal to accommodate the Parliament's amendments, the Council, as now, can further change the Commission proposal only by unanimity. Where the Council accepts the revised proposal, it will, as now, vote according to the relevant article of the treaty. If the Parliament rejects altogether the common position of the Council, the Council can still vote through a proposal in the form in which it wants it to be enacted, but in those circumstances it must do so by unanimity.
In short, therefore, the Parliament can in certain circumstances change the Council's voting provisions back from qualified majority to unanimity. In no circumstances can it change them the other way.
The new co-operation procedure will produce a greater awareness in Council and Parliament of each other's views, but it will make no decisive change in the institutional balance because the last word remains with the Council. If judiciously used, the new procedure could enable the Parliament to play a more active and positive role in Community decision-taking. The Parliament is one of the Community's institutions. It was elected in 1984 by 114 million people and serves a total population of 320


million. Its negative powers are considerable—the House has always acknowledged that—but its positive opportunities have until now been relatively few. If it works co-operatively with the Council and the Commission, that can only be in the interests of faster decision-taking, for the benefit of the Community as a whole.
The Single European Act involves two further changes.

Mr. Nicholas Budgen: Can my right hon. and learned Friend confirm that these proposals enhance the role of the Parliament? If so, is that not to the disadvantage of other institutions in the Community?

Sir Geoffrey Howe: Let there be no misunderstanding about this. The Council can reject European Parliament amendments by a qualified majority where the Commission does not adopt them as its own. Where the Commission does adopt them as its own, the Council can reject them by unanimity. That represents no change from the present position, but of course the pattern of exchanges that I have described will enhance the potential influence of the Parliament and that will, I believe, be in the interests of faster decision-taking, to the benefit of the Community as a whole.
I should like to deal with two further changes in the role of the European Parliament. At present, the Parliament's opinion is required on requests by non-member states to join the Community. Henceforth, the Parliament will have to give its agreement before such accessions can take place. This change does not diminish the role of national Parliaments. No new accession can take place without the consent of this Parliament and of every other national Parliament. Similarly, the European Parliament will henceforth be entitled to approve new association agreements between the Community and non-member states. These agreements take various forms. Where the consent of national Parliaments is currently required, that will remain the case for the future.
It is these two new provisions which give rise to the requirement under section 6 of the European Assembly Elections Act 1978 for the Single European Act 1986 as a whole to be approved by the House. That requirement is covered in clause 3 of the Bill.

Mr. Robert Jackson: Does my right hon. and learned Friend agree that one of the most important features of the Act is the extension of majority voting? In cases where the Council takes a majority vote, the only way in which the views of elected people can be directly brought to bear is through the European Parliament.

Sir Geoffrey Howe: That is not the only way. I take the point made by my hon. Friend. That is an additional channel through which those views can be brought to bear, but they can also be brought to bear by the impact on members of the Council by national Parliaments.

Sir Anthony Meyer: Does my right hon. and learned Friend not find it extraordinary that those hon. Members who were claiming that the unanimity rule had been breached are now complaining because the Parliament, apparently, has powers to enforce the unanimity rule?

Sir Geoffrey Howe: I have explained the position. These changes will enable the Parliament to secure a change from majority voting to unanimity. As my hon. Friend points out, on the whole that should be a change in the direction in which my other hon. Friend said would be welcome.
I should now like to turn to the other part of the Single European Act 1986 which is not part of the Bill but which is in the document, the treaty provisions dealing with foreign policy. They do not form part of the Bill, because they do not and will not form part of Community law. However, the House will wish to take this opportunity to consider these provisions which relate to foreign policy.
The new treaty provisions do not in themselves break new ground, but for the first time they enshrine in an international agreement the agreements and practices that have been built up over the last 15 years. The treaty also strengthens the existing commitment to consult on the economic and political aspects of security questions. As hon. Members said, in the last couple of weeks that objective has faced a severe practical test. Events have dramatically demonstrated the need for Europe to speak with one voice. To the extent that I have described, Europe has demonstrated a growing capacity to do so. [Interruption. The House may be dismissive about this, but it represents a substantial change. It would not have been possible to mobilise agreement between 12 independent nations to the extent that we have done so were it not for the habit of working together in the European Community.
On Monday, we took a significant step towards denying Libya the capacity to mount terrorist actions in Europe. Of course, that outcome was not reached quickly or easily. As people pointed out, we could have gone further on our own. But vigorous action by one member state could not be as effective as concerted action by 12 member states. If the terrorist threat in Europe is to be reduced, the tentacles put out by Gaddafi or by anybody else have got to be severed in Greece as well as in Great Britain, in Lisbon as well as in London. That is the significance of the step we took this week and that step was an important achievement. We need to build on this beginning. It must inevitably be harder to agree common action than simple consultation. That task will be helped by the treaty provisions that we have agreed.

Mr. J. Enoch Powell: The Secretary of State has told the House that the provisions for political co-operation are not embodied in our law by the Bill. That is what I understood him to say. Could he explain how the embodiment of title I does not do that, because article 3.2 of title I appears specifically to bring into force the contents of title III?

Sir Geoffrey Howe: It brings into force title III because that title is a component of the international agreement which is here set out. It brings it into force as an agreement binding in international law between the member states, but it does not require incorporation in the law of member states. Of course, it requires to be brought into force as an agreement between member states. That is why I am describing it now, because it is translating into a binding international agreement the habits and practices that have grown up on political co-operation in recent years.
An important aim of these treaty provisions—and they are treaty provisions—is to achieve greater


consistency between external policies that are decided within the Community framework on matters such as trade and aid, and the foreign policy objectives identified by member states on political co-operation. Clearly, we need to make sure that policies decided in the Community march alongside and reinforce actions and assessments agreed in political co-operation.
The treaty will also provide for the creation of a small secretariat based in Brussels that will help the presidency of the day. That will provide greater continuity between presidencies, help to ensure consistency in Community policies, and take on the burden of arranging meetings, most of which will take place in Brussels. This task now falls on the presidency of the day. The secretariat officials will be seconded on a rotating basis from their national Administrations.

Mr. William Cash: Would my right hon. and learned Friend care to comment on the fact that on Second Reading of a Bill of this importance that deals with the future of Britain and the European Community, the most important measure in this field since 1972, there are six Labour Members present, one Scottish Nationalist, one Unionist, one Liberal and not a single member of the Social Democratic party?

Sir Geoffrey Howe: That is an interesting observation because it shows that the matter is no longer something about which there is great controversy. I am not in the least surprised that there remains a small, valiant and observant watch on the Government side of the House. That is also the case when we are debating other topics. The generality of the propositions I am commending are well supported on both sides of the House. I know that the small and enthusiastic group of my hon. Friends who are in the House are anxious about references to European union in the preamble to the Single European Act 1986. Such declarations are not new in the Community. They have been made at European Councils under successive Governments, Labour as well as Conservative, since at least 1972.
The reference in the Single European Act specifically relates to the Stuttgart Declaration agreed by my right hon. Friend the Prime Minister and the other Heads of Government in June 1983. That declaration referred to the growing unity among the member states in the following terms:
European Union is being achieved by deepening and broadening the scope of European activities so that they coherently cover, albeit on a variety of legal bases, a growing proportion of member states mutual relations and of their external relations".
We are not talking about the declaration or proclamation of a United States of Europe or about vague political or legal goals. We are talking about practical steps towards the unity that is essential if Europe is to maintain and enhance its economic and political position in a harshly competitive world.
These are steps to which all the member Governments are ready to agree. No doubt the House will hear a good deal from some of my hon. Friends and from some Opposition Members about the fearful constitutional fantasies that preoccupy them. Those are terrors for children; not for me. I hope that the House will put them aside.
In a world where no European power can any longer stand on its own, our national goals can be achieved only

in co-operation with our Community partners. The most fundamental of those goals has always been the preservation of peace and the enhancement of democracy. The Single European Act serves that fundamental objective. It enhances co-operation in foreign policy, and it enhances our ability to take the steps that we need to take as a Community to make ourselves competitive internationally and to create prosperity and jobs. It is on that basis that I commend the Bill to the House.

Mr. George Robertson: In many ways the importance of this debate can be measured by the fact that a Scot is making the opening Opposition speech and that another Scot will make the closing one in an evening when, at Wembley, an even older union than that with Europe will be put under even greater strain than the European Community is under now because of the unhappiness of some Conservative Members.
About nine weeks from now the Foreign Secretary will take over the presidency of the European Council of Ministers. He will then find himself in the driving seat of a European Community with massive and seemingly insuperable problems. He will find another gigantic crisis, with the cash already running out and all the promises of budget discipline that were paraded before us last year lying in a heap. The CAP is again out of control, its costs swallowing up bigger and bigger chunks of the entire Community budget, and with no sign of reform on the horizon.
A new and frightening split has developed between the traditional allies in western Europe and the United States of America, with the Community incapable of persuading President Reagan of the consequences and dangers of his recklessness. A trade war with the United States is not far away either. The 12 nations in the Community for which the Foreign Secretary will take responsibility on 1 July have over 15 million people out of work. Two in every five are under the age of 25. Little or nothing is being done to mobilise the political will to get them back to work. On top of all that, the competitive edge of our collective industrial capacity is continually under challenge from the far east, from Japan and from the Americans.
That is the European Community which the Foreign Secretary will inherit in only nine weeks' time. It is a formidable prospect, and it is easy to see why the Minister, the hon. Member for Wallasey (Mrs. Chalker), the Mary Poppins of the Tory party, has been drafted in to put an acceptable face on the solutions which the Foreign Secretary might have to dredge out during his presidency.
In the face of all those mind-blowing problems, we are today considering a wholly irrelevant Bill that will give effect to what is remarkably and, indeed, mysteriously called the Single European Act. The 11 other national Parliaments will later do the same thing. However, so remarkable and mysterious is the Act's name that during the last debate the Minister of State, who is responsible for European Community affairs, did not know why it was called the Single European Act. Moreover, at the Königswinter conference a couple of weeks ago at Cambridge, her opposite number in the German Government confessed that he did not have a clue why it was called that.
Today, the Foreign Secretary seemed to say that the Single European Act was the greatest thing since imperial preference, but it is, in reality, a child whom he and the


Prime Minister wanted to strangle at birth. When the Prime Minister came back last July from her humiliation at the Milan summit, she was absolutely explicit to the House when she said:
positive improvements in the Community's decision-making could have been decided in Milan and did not require any treaty amendment … I saw nothing before us that would require an amendment to the treaty."—[Official Report, 2 July 1985; Vol. 82, c. 185–89.]
Even before Milan, the right hon. and learned Member for Edinburgh, Pentlands (Mr. Rifkind), who has now been parachuted into the Cabinet, but who served on the Dooge committee, whose ideas formed the basis of the Single European Act, rubbished, with characteristic vigour and in his own inimitable style, the idea of amending the treaty. He said:
Her Majesty's Government believe that major progress can be made at the present time without amending the treaty".
The right hon. and learned Member for Pentlands also made another point that should not escape us. He said:
Once one embarks on the road of treaty amendment, one must bear in mind that, in whatever area it is amended, it will require not only the unanimous agreement of all 12 member Governments but the unanimous ratification of all 12 national Parliaments. Even if any proposals were considered to be acceptable, at the least we would be contemplating a delay of one, two or possibly even three years before such a process would be complete."—[Official Report, 20 June 1985; Vol. 81, c. 473.]
Those are the words, not of some fly-by-night forecaster, or of some marginal figure who, like so many Conservative Members, has held high office and then gone into well-deserved obscurity, but of a man who has been promoted as a result of his record as a Minister with responsibility for the Common Market. He is now a full member of the Cabinet. We should therefore accept the authority of his words, his prophecy and his pessimism. We look forward to hearing from his successor later in the debate and to finding out whether the hon. Lady can say when this new vision that has been paraded before us will become a reality.
We have a measure which the Government did not want, thought unnecessary and believed would divert us for years away from the real areas that need attention, yet it is now placed before us as the answer to all our problems. The Government and the then Minister of State were right then, just as the Foreign Secretary is wrong today. This measure is of profound irrelevance to the deep-seated concerns of Europe's peoples, and it diverts us from the remedies and solutions for which we should be reaching.
The Labour party believes that Europe's nations should be looking together for a strategy for growth and the creation of jobs. We believe that with political will and courage such a strategy is both possible and necessary, and could be successful. Indeed, the annual economic report of the European Commission, which was published in November 1985, and which is dismissed in a couple of lines in the White Paper tacked on to this debate, is entitled, "A Co-operative Growth Strategy for More Employment", but we have heard not a word about the report from the Government. Of course, that is not surprising when this country has the highest unemployment rate known in modern times.
We believe that radical reform of the CAP is urgently needed and should be a precondition of any possible future action by the Community in any area because its financial

excesses endanger all programmes, but we have heard nothing on that subject today, although it is necessarily part of the debate. We believe in the importance of the regional and social funds, and in their being properly funded to redistribute the Community's resources in a better and more organised way. The Single European Act places obligations on the regional and social funds in order to avoid the worst problems that might arise in a wider and more effective internal market, but the Government have voted to cut those valuable instruments of economic action and to sit immobile as the CAP's excesses threaten a drying-up of the funds, with all that that means for our own regions.

Mr. Jackson: The hon. Gentleman and his colleagues should be congratulated on their efforts to bring the Labour party into modern Europe. In his consultations with representatives of the Social Democratic and Socialist parties observers in the Community, does he find the same lack of enthusiasm for institutional developments as he has just expressed?

Mr. Robertson: I know that the hon. Gentleman finds himself on the margins of this debate, and he will probably remain there for most of it. In discussions with Social Democratic and Socialist colleagues it became clear that their priority is that of the Labour party, which is to use the engine of European economic growth to get our people back to work. Institutional reform is still well down the ladder of their priorities, just as it is for ours.
We believe in joint collaboration on research and technology, and in using public funds in Europe to stimulate the Eureka project—and ESPRIT—to counter the competition from the ill-directed public largesse of the American SDI programme and the economic locomotive in the far east.
We believe that in all these ways Europe could mean something to its beleaguered citizens, but the Single European Act and the Bill offer them little or nothing. Institutional reform is the bread and circuses of European politics. It erects monuments—usually in paper—when people instead want action and results.

The Minister of State, Foreign and Commonwealth Office (Mrs. Lynda Chalker): This is a most interesting deployment of the hon. Gentleman's case. I wonder whether he can square his statement of Labour party policy with the comment of the hon. Member for Dagenham (Mr. Gould), the Opposition Front-Bench spokesman on trade, who was not only part of the research group of the Labour Common Market Safeguards Committee, but edited a report in September 1985, which seems to be at variance with what the hon. Gentleman has been saying for the last five minutes?

Mr. Robertson: No, it is not. My hon. Friend the Member for Dagenham (Mr. Gould) is entitled to his opinions. He holds a Front-Bench position and will undoubtedly express his own point of view, but I assure the hon. Lady that his views and mine on most of the practical issues of European policy do not diverge as much as she would like them to do.
I wish to concentrate on a couple of areas of the Single European Act which I believe show how meaningless even this Government see this treaty change. The first is an area in which we broadly agree with the Government as being desirable. In Common Market gobbledegook they call it


European political co-operation, but they mean foreign policy co-operation. The Act calls on the European Community to
endeavour jointly to formulate and implement a European foreign policy
and to
undertake to inform and consult each other on any foreign policy matters of general interest
and
avoid any action or position which impairs their effectiveness as a cohesive force in international relations or within organisations.
It is small wonder that we have heard so little of this matter from the Foreign Secretary this afternoon. This pie in the sky is a considerable embarrassment to the Government in a week when they have found themselves seriously out of line with their Community partners. Perhaps I might remind the hon. Lady of her words in the debate on 5 March, although they ring somewhat hollow in the light of today's and this week's events. She said:
It is helpful to be in firm political combination with our partners in Europe, as we have shown in the past two months in the statement on terrorism".—[Official Report, 5 March 1986; Vol. 93, c. 403.]
A week after the bombing of Libya from bases in Britain, which were used in the face of united and concerted Europen opinion, and two weeks after consultation and discussion in the Community on Libya, we get some limp decision to stop the export of subsidised butter to that evil regime, but no statement on other subsidised products which flow from these shores to that regime, which we are told is to be isolated in every way possible. Are the Government still muddling around trying to be Communautaire on the one hand, and halfheartedly endorsing this idea of "informing and consulting" our partners, while at the same time trying to square it with our obsequious toadying to the Americans and their anti-Europeanism?
We have been told that the Foreign Secretary is the architect of the draft treaty on foreign policy co-operation—or so all the British papers told us before the Milan summit fiasco—but as the architect surveys the shambles for which he has personally been responsible, should he not reflect on the other areas where the rhetoric that he peddles with such conviction in his speeches founders so often on the reality of his actions?
It is not just on Libya that Her Majesty's Government depart from the European line. They vetoed the common line on South Africa and the minimal sanctions proposed until President Reagan had done his U-turn. They ignored the united voice expressed among our partners about the Falkland Islands, where we stand alone. They ignored the unanimous advice offered on our supine withdrawal from UNESCO, and they show none of the genuine feeling of concern for American action in central America that is shared by our European partners.
What do the Government mean by "formulating and implementing a European foreign policy?" Is it to be the Prime Minister's policy just foisted on our European partners, or will she and other Ministers start to listen to the other members of the Community when they speak—and speak sense too?

Mr. Marlow: Would the hon. Gentleman like to take this opportunity to tell the House and the country whether the Labour party is now totally and utterly anti-American?

Mr. Robertson: It is always likely that the hon. Member for Northampton, North (Mr. Marlow), who

usually spends his time harassing Ministers, will try to attack the Opposition, but if that is the level of his criticism I think that he had better stay in his seat for the rest of the evening. The Labour party is not anti-American, it never has been, and it is unlikely to be in the future.
The central issue of this Act, we are now told, is not better decision making within the Community. as the Dooge committee told us, but the vision of the internal market. The dream of Lord Cockfield is to be the target of the British presidency and all the eggs are to be precariously placed in this basket. The Dooge committee was eloquent on the objectives of the internal market. It said that it
would mean more jobs, more prosperity and faster growth, and would thus make the Community a reality for its citizens.
Nowhere are we told when or how this is all to take place, or how, in a recession-battered continent, fewer barriers will not just mean shared misery and not increased prosperity.
To get to Lord Cockfield's dream, this Act introduces qualified majority voting, and single majority voting, across a host of areas in EEC decision making, stretching from Common Market banking and insurance to directives on radio and television broadcasting.
The Labour party is not opposed to moves towards a more genuine internal market. It is not opposed to reducing some of the bureaucratic and protectionist barriers to trade inside the European Community. However, there are fundamental issues at stake for this country, and all the heady vision of Lord Cockfield and the Foreign Secretary himself do not answer the points.
First, do the Government have any idea of the effects that these changes will have on British industry—for for employment, for our balance of payments, for the degree of import penetration, for our balance of trade in manufacturing, which has now sunk so low, and for our invisible earnings from services? Nothing that they have said in the last two years suggests that they have the slightest clue about the effect, but if they have, they have a duty to tell us in detail in a White Paper which the House can consider. We have asked for that repeatedly. It is one of the minimal requests that this House can make, but the Government have failed to provide such information. Conversely, they may not know the effects—that is the most likely scenario—and we are embarking on another experiment, a gamble with what is left of Britain's future for the sake of the free market ideology of the Government.
The second point on the internal market concerns the desire by Lord Cockfield and by the European Commission and others to get to fiscal harmonisation, especially of VAT rates. The Government have rightly stressed their opposition to that feature. We welcome that commitment and the fact that such changes will be subject to unanimity, but Lord Cockfield, who is a key member of the Thatcher establishment, is fully wedded to fiscal harmonisation, and he is not alone.
Sir Henry Plumb, the leader of the Tory Members of the European Parliament, said in the debate on 11 December in the European Parliament:
It was hard to see how there could be an internal market without a measure of harmonisation in fiscal matters.
What confidence can the House have that the Prime Minister's resolution will stand up to such powerful


influences within the Community when she so enthusiastically accepts the basic philosophy of Lord Cockfield and the other free traders?
The third point of principle on the interal market concerns the British Government's view of the internal market and how it diverges from that of the other member states. The Government's ideology sees a free trade area—a Europe-wide enterprise zone—with deregulation triumphant and all social protections dismantled, but for our partners in the European Community, even those on the Right wing, it is about much more than that.
The President of the European Commission, Jacques Delors, said in January:
The creation of a vast economic area based on the market and business co-operation is inconceivable, I would say, unattainable, without some harmonisation of social legislation.
Yet the Single European Act which we are asked to approve today treats the people of Europe as inferior to the goods which they produce.
Because unanimity is to be required for provisions relating to the
rights and interests of employed persons",
our Government will go on denying the people of Britain—and indeed the rest of the European Community—the benefits of directives on employee consultation and information, parental leave and worker participation. Instead, Lord Young has presented a programme for deregulation Community-wide which will strip workers of many of the rights which they already enjoy.
The Government say that this is because they believe, first, that the directive would impose costs on small and medium-sized businesses and would destroy jobs; and, secondly, that such arrangements are a matter between employers and employees. Neither of those foot-dragging excuses stands up. To take one example, the House of Lords Select Committee could find no reason for believing that the directive on parental leave, which the Government still insist on vetoing, would impose burdens on industry which would result in job losses, since it would affect only 1 per cent. of the people.
The Government find it convenient to accept European legislation on health and safety and, with some reluctance, legislation on equal pay, but they happily meddle in their own industrial law jungle. Why, therefore, should they veto the beneficial standards set by the Community if they truly believe in a genuine internal market?
Where we really distrust the Government in their belief in the idea of an internal market which will work for the interests of Europe's people is on the impact on the regions. The Single European Act recognises explicitly, even if the Government will not admit it, that if the internal European market is to succeed, it can only be through the achievement of economies of scale in production. If that is not to mean another magnet for industry, drawing it to the golden triangle in the centre of northern Europe, the Community needs the clout of the regional and social funds.
The Act calls on the Community to
in particular aim at reducing disparities between the various regions and the backwardness of the least favoured regions
and says that
the implementation of the common policies and of the internal market shall take into account the objectives.
The Act demands that there be new rules for the management of the structural funds and that they should

be subject to unanimity. The Government must tell the House whether they will allow the regional and social funds to do what they are designed to do and what the Single European Act says they must do. Will the cash crisis which threatens these valuable—and now legally designated valuable—funds be solved in their favour, or in favour of a capitulation to the German farm lobby?
If the words in the Single European Act mean what they say, and if the Government mean what they subscribe to, we might have some faith in these changes in the Treaty of Rome. However, we agreed with Ministers and with the Prime Minister before the Milan summit when they said that treaty amendments were unnecessary, undesirable and a time-wasting diversion. The Labour party has not done any somersaults and still believes that that is the case.
Even when it struggles through the 12 Parliaments, this measure will not help even one of Europe's unemployed, and it will not add 1 per cent. to Europe's pitiful and lamentable growth rate. Nor will it galvanise the political will which alone can transform European words into action which our peoples will understand. Instead, it will provide another bureaucratic alibi for inaction on the key areas of the Community's crisis—inaction on the food mountains and on the price regime which builds them, and inaction on real technology co-operation to ensure our future.
The Single European Act will mean more majority voting, nominal and purely cosmetic references to monetary union, a gesture to increased influence in the European Parliament, foreign policy co-operation, and more paper commitments to technological development. That is the summation of the Single European Act. To pretend that it is a substitute for political courage and economic hard progress is to delude cynically all the people of the Community. It is a diversion from the real task before us. That is why we shall vote against it tonight.

Sir Edward du Cann: This is a short Bill but its appearance entirely belies its significance. As the hon. Member for Hamilton (Mr. Robertson) said in his thoughtful speech, it is probably, in terms of Britain's membership of the European Community, the largest constitutional measure that the House has had to discuss since our discussions on the European Communities Act 1972. It is right that we in this House should be concerned about and interested in the constitutional proposals which are put in front of us. We have very good reasons in practical terms to be most proud of our own constitution and the experience which we have evolved over the centuries.
We have learnt in our democracy how to provide Governments with authority, yet at the same time to provide opportunities for those of us who are privileged to be in the House as the people's representatives to exercise some control over that authority—a process which, in the context of the increased growth of the power of the Executive, we have substantially enhanced by the introduction of departmental Select Committees in recent years. All of us who are privileged to be Members of Parliament have every reason to defend what we have improved over the centuries; indeed, have been ready to defend at any time that it came into peril.

Mr. John Butterfill: My right hon. Friend has welcomed the evolution of the British


constitution. Does he agree that this Bill represents evolution within the European Community and should be welcomed equally?

Sir Edward du Cann: I think that the Bill represents a very substantial step forward in the process of constitutional change on which this country deliberately embarked some years ago. The question I have to ask is whether the pace is correct.
I listened with great interest to what my right hon. and learned Friend the Foreign Secretary said. He used a phrase that I found offensive. It is wholly wrong to describe those of us who have shown a genuine interest in constitutional matters over a long time. We have arrived at our view after most careful thought, and hold it sincerely. I do not care for being called, in his phrase, one who is concerned about terrors for children. It is the duty of all of us, whoever we are and whatever our political faiths may be, to defend our constitution and all it stands for with all the strength we can possibly command. I therefore make no apology for attempting to do exactly that today.
My personal position on these matters is well known in this House. I was opposed to Britain's signature to the treaty of Rome. I believed it was not in the best interests of this nation, nor in accordance with our historic tradition. Policy alternatives were open to us. I see no reason to change my mind about my decision. In signing the treaty of Rome we abandoned some flexibility in dealing with our own affairs and in negotiating our position in the world in matters of foreign policy and trade, and that I am sure was a mistake. Instead, we have now taken on board a new rigidity of discipline in foreign policy and trade matters which in the end I believe will serve this country less well than a more flexible position would have done.
There it is; the matter has been decided by an overwhelming vote in the House and in this country. The task of all of us now is to endeavour to make the European Community a more effective instrument, if we can. That is exactly what we should be talking about now and that is why I believe the Bill is so wrong.
Why the devil are we talking about constitutional matters at this stage? There is immense impatience in this country with the European Community and the way in which it conducts its practical affairs. If we want to get the country behind the European Community, all our energies should be devoted to making it much more effective, by reforming, for example, the common agricultural policy, by bringing some sense into the way in which the Community deals with its cash, and by achieving greater co-ordination, as my right hon. and learned Friend has argued, in matters of trade and foreign policy. I believe that our priorities now are entirely wrong. We should not be wasting time on constitutional matters when there is so much to do practically.

Sir Geoffrey Howe: I hope that when my right hon. Friend addresses these matters he will focus on the point that the central features of the Bill are designed to make the institutional changes so that faster progress can be made so that there can be more effective co-operation. He may not agree with the method, but those are our objectives.

Sir Edward du Cann: It is a most extraordinary thing that that is exactly what has not been happening. If there

were an attractive record of progress and co-operation, I should have more faith in my right hon. and learned Friend's protestations.
My point is really very simple. I believe that we are giving our discussions the wrong emphasis and that we are going for the wrong priorities. In that way, we are being tactless, because the country generally will regard us as impractical, to say the least. There may well be a case for improving procedures, as my right hon. and learned Friend argues, but I do not believe the country is ready yet to make the substantial constitutional changes that are now proposed. For instance, this is not the time to agree to any derogation of our national sovereignty. I was very surprised at the exchanges my right hon. and learned Friend had with some of my hon. Friends on the subject of the Luxembourg agreement. I do not know whether hon. Members have had the opportunity to refer to the admirable reference sheet on the Bill, produced by the Library, but I draw attention to a paragraph on page 7 which makes a striking point. This is not produced by any partisan group; it is a factual report. The paragraph states:
The legal fragility of the Luxembourg agreement was demonstrated in April 1982.
That is the point that my hon. Friend the Member for Winchester (Mr. Browne) was making. It continues:
The Council then adopted EEC agricultural prices for the coming year by majority vote, despite the demand of Britain that adoption should be delayed until a settlement was reached on the budgetary situation.
That matter was of vital national interest to us, yet it was ruled that, since the majority vote was in accordance with treaty provisions, the Council regulation stood and took legal effect. Many of us felt that we might just as well not have had the Luxembourg agreement at all. Derogation of national sovereignty while the affairs of the European Community are in such a mess practically has gone far enough and should go no further.

Mr. Cash: Will my right hon. Friend agree that the problem lies not necessarily in the workings of the Luxembourg compromise but more in the scrutiny arrangements that take place in the House? It is a matter of great importance that we manage to organise our affairs here to ensure that we have proper control over things done in our names in the working groups in the Council of Parliamentary Representatives and thereby through the Ministers themselves.

Sir Edward du Cann: I would not disagree at all with my hon. Friend if he says that we should strengthen our scrutiny arrangements in this House. Indeed, I have pressed hard for that to be done, as he will recall.
I also noted what my right hon. and learned Friend the Foreign Secretary said about the commitment to European union. He said that this sort of thing is always said. I believe that it is said too often, and that people should stop saying it. If we go on saying it, the country will believe that that is what we really seek. However, it is not the view of the majority of hon. Members that that is a correct objective. The less said about it in future the better. Right hon. and hon. Members and members of the Government shold make that clear at every possible opportunity.

Mr. Bill Walker: My right hon. Friend will be aware that union means something north of the border, and certainly in Northern Ireland; it is something we care deeply about. This afternoon an explanation was given why it was right to call the


European Assembly a Parliament. Would it not be correct to assume that, if we continue to use the word "union" in the way it has been used and is being used, we Scots will be justified in thinking that the word means union as we understand it?

Sir Edward du Cann: I think that that is a wise observation. I believe that my hon. Friend does well to remind us all, wheresoever the word is applied in the United Kingdom, of our Unionist tradition.
We should not now be giving substantial new powers to what is still called the Assembly. I do not believe that it was ever suggested that that was what would be achieved so soon, nor do I believe that the Assembly is properly equipped to exercise those new powers at present. If it is ultimately intended in this Parliament to give these powers, let us come clean with the electorate and say that that is the position. These important steps in that direction at this time are hopelessly premature.
I find it extraordinary that the European Court receives as much attention as it does. If it has some useful function to perform for private citizens in this country, there must be some lack in our judicial system, and I should like to see that rectified. I dislike very much the idea of a supranational court and I would do nothing to see that cause advanced at this stage.

Mr. Jackson: Like all other hon. Members, I accept my right hon. Friend's sincerity. He argues that it is a matter of choosing the right moment. Can he tell us what are the circumstances in which he thinks it would be appropriate in future to take the steps that he suggests we now defer?

Sir Edward du Cann: If the European Community were to show itself effective in running its own affairs and adopt practical policies for instance in agriculture, in which the population generally has some faith and belief, and if there were a genuine spirit of working together in foreign affairs, perhaps one could say that we should move on to other things. However, as the world knows, that is not the situation. The population of this country is extremely impatient with the way in which the European Community conducts its affairs. In endeavouring to press on too early with such important constitutional changes, we risk ridicule.
I believe that commitments to monetary union would be hopelessly premature. What we should be aiming to do, surely, is to popularise the EEC by making it effective. That is what my right hon. and hon. Friends should be devoting their attention to.
Since the treaty of Rome was adopted by its original signatories, much has changed. The United Kingdom has joined the European Community. More recently, there has been the accession of Greece, Spain and Portugal. No doubt the House is very pleased to see how the Community is developing in numbers.
However, the original considerations that led to the establishment of the Community have changed entirely. One could see every reason why France and Germany should come together in the years immediately after the war. No doubt there was a sigh of relief throughout Europe, and perhaps throughout the civilised world, when that happened. However, the worldwide interests of our friends in Greece are very different from those of the

United Kingdom. Again, the interests of Spain and Portugal are very different from the interests of Germany, Italy and Greece.
Instead of endeavouring to drive the Community forward along old-fashioned tram lines adopted to serve an earlier situation, is it not perhaps time that we took a fresh look at the scene in order to decide whether important provisions should be added to the treaty?

Mr. Hugh Dykes: Sabotage.

Sir Edward du Cann: That would not be sabotage at all. We are talking about evolution and development. Let us evolve in tune with the times. Let us not automatically assume that an old pattern is appropriate for today. I hope that my right hon. and learned Friend and the Government will take that suggestion seriously.
I am not sure, either, that it is appropriate that the Committee stage of the House should be taken in the usual way. I suggest that the Bill is an admirable case for submission to one of the Special Standing Committees, the procedure for which was adopted during the last Parliament. Many detailed matters require consideration in connection with the Bill, and it would be appropriate for evidence to be taken from outside.
A large section in the centre of my right hon. and learned Friend's speech was taken up with technical and trade matters. I am sure that we are unanimous in our agreement that we need to make the European Community more effective. That being so, it would be no bad thing to call in outside experts to advise us about the constitutional and other developments contained in the Bill. I hope that that suggestion will commend itself to my right hon. and learned Friend.
For the reasons that I have endeavoured to advance, it is essential that the House should dedicate itself to making the European Community arrangements more effective. I do not believe, therefore, that it is timely that we should be discussing, let alone deciding, a measure such as this. I wish with all my heart that the Government would withdraw it.

Sir Russell Johnston: I greatly respect the right hon. Member for Taunton (Sir E. du Cann), but I deeply disagree with him. As a citizen of the United Kingdom—and indeed one of Scottish origin, as may be visually perceived—I am entitled to take a critical view of the constitution of the country in which I live, just as much as the right hon. Gentleman is entitled to suggest that he wishes that constitution to evolve extremely slowly or perhaps not to change much at all. I want to move faster; the right hon. Gentleman wants to move more slowly. That is a fair difference. However, the right hon. Gentleman should give me and others like me the right to our views.
I take a very critical view of our country and its constitution, of the degree to which we are properly democratic and of our failure to take advantage of the opportunities presented by the European Community. I should like to begin with two relevant quotations. The first is from the solemn declaration on European union, to which the Foreign Secretary referred. It was signed at Stuttgart in 1983 by the Prime Minister, among others. The preamble states:
The Heads of State or Governments of Members States of the European Communities meeting within the European Council


resolved to continue the work begun on the basis of the Treaties of Paris and Rome and to create a united Europe, which is more than ever necessary in order to meet the dangers of the world situation, capable of assuming the responsibilities incumbent on it by virtue of its political role, its economic potential and its manifold links with other peoples.
Paragraph 4(3) of the declaration also stated that the heads of state or Government would subject the declaration to a general review as soon as progress achieved towards European unification justified such action, but not later than five years from the signature of the declaration—in other words, by June 1988.
I am not sure whether the present measure is regarded as a step in that direction or whether—as the Foreign Secretary seemed to suggest—although declarations about union take place from time to time, behind the rhetoric, we must move in a practical manner. I want us to move in a timed manner. It is now generally accepted that the Single Act does not do much to further the aim of European union. That is the view of the European movement in the United Kingdom, as the right hon. and learned Member for Hexham (Mr. Rippon) will confirm. It is also the view of the international European movement, which has passed a resolution to that effect.
What is the Liberal position? From 10 to 11 April—

Mr. Teddy Taylor: rose—

Mr. Cash: rose—

Sir Russell Johnston: Patience. If the hon. Gentlemen will wait a moment, I will tell them.
On 10 and 11 April the 10th congress of European Liberal Democrats was held in Catania. I moved a resolution on the European Single Act on behalf not only of the British Liberal party but of the German Free Democratic party, the Dutch National Democratic Freedom party or VVD, the Italian Liberals and the Italian Republicans. The motion was passed unanimously with no dissent from any of the Liberal parties in the European Community. It therefore represents the position of Liberals in the Community.
The resolution stated that the congress
endorses the European Parliament's critical assessment of the Single Act and confirms the opinion that the amendments to the EEC Treaty proposed therein are insufficient to achieve the development of the political Union so necessary to the European peoples, leaving, for example, foreign, security and monetary policy solely to intergovernmental cooperation, nor are they sufficient to confer on the European Parliament the legislative and budgetary powers appropriate to an Assembly elected by universal suffrage
even if that suffrage is, at least in our country, flawed—
or to transform the EEC Commission into an effective European executive;
Reaffirms its support for a European Union with adequate competences in the fields of foreign, security and monetary policies, and in which the Parliament has joint legislative powers with the Council. Restates its commitment to a uniform electoral system for the EP based on the principle of proportional representation and invites the Committee preparing the 1989 elections to maintain these goals as top priorities in their work.
Welcomes the programme of Action for the completion of the internal market by 1992 put forward by the Commission and endorsed by the Single Act, but emphasises the fact that unless the Council of Ministers returns to the practice of taking its decisions by majority vote, even this more limited goal is also doomed to remain merely a pious wish".
I see that the Foreign Secretary is about to leave. I would very much like to ask him to comment on one paragraph.
The resolution went on:
Welcomes the Dutch Presidency's proposal to amend the Council statutes so that the European Commission or a minimum

of 3 member states would suffice to oblige the Council to proceed directly to a vote in all those cases where the Treaty provides for majority approval".
I understand—the Foreign Secretary can correct me but he did not mention it in his speech—that the Dutch Presidency, which is in control until the end of June, has proposed at the Council that this could be done through the standing orders of the Council which can be changed by majority vote. That would be a considerable step forward. I do not expect the Foreign Secretary to say anything about that now but I wonder if there is a possibility of the Minister mentioning it when she replies.
The resolution concluded by saying:
Invites the Member States Governments to approve this proposal without delay, overcoming any opposition which may be raised
they used a rather gentle phrase—
by some more reticent members.
On the face of it, one could say that the approach by the Council of Ministers in Stuttgart in 1983 was very much the same as that of the Liberals in Catania in 1986. In reality there is a deep difference. The Single European Act is not a step backwards. That is good. However, it is a great disappointment. It seems almost like a sidestep.
For the Council of Ministers the Single European Act proposes majority voting on a limited number of topics largely connected with measures, as the Foreign Secretary said, to establish an internal market but not, as he confirmed, mobility of labour or health regulations. Both, especially the latter, have been used to hold up imports between European countries. I found the Secretary of State unpersuasive in his remarks on that. One cannot just say, "We will have majority voting where it suits us, but not where it might not suit us." One would not get anywhere that way. The Dutch proposal to which I have referred is at least a practical one.

Mr. Butterfill: Does the hon. Gentleman agree that, as an island, we have a rather special position to protect with regard to certain health matters? Therefore, we need to have the right to veto certain specific proposals which reflect that character of our nation.

Sir Russell Johnston: That is utter nonsense. The idea that because one is on an island one has a different view on health is nonsense. My goodness, the Cheviot hills are a border between England and Scotland. We have strong views on health.

Mr. Geoffrey Rippon: Does the hon. Gentleman agree that it is right that we reserve our position on animal health regulations in order to prevent such things as rabies? That is, of course, protected under the measures which the Government are proposing.

Sir Russell Johnston: That is right. Surely it is also right to seek positively to reach harmonisation on health regulations—although, naturally, on a basis not of reducing standards but of maintaining them at the best level. I accept that.

Mr. Jim Craigen: One could never guarantee that.

Sir Russell Johnston: That will be guaranteed, because that is what one negotiates with one's partners. There is no doubt that health regulations have, at times, been used as an excuse.

Mr. Bill Walker: Chickens.

Sir Russell Johnston: Indeed, and I think that the French were up to some tricks. We have all been at it and it does not help the cohesion of the Community at all.
The Single European Act proposes that the Parliament should be allowed a second opportunity to voice an opinion on a range of subjects related to the internal market. That looks as if the Parliament's powers are being increased. However, that extension is deceptive. Once the Council of Ministers has discussed a measure and reached a view, it is now required to give the Parliament a chance to express a view. If the Parliament does not give an opinion within three months, the Council of Ministers can go ahead anyway.
If the Parliament does not agree with the Council and proposes amendments, those amendments can be accepted by the Council of Ministers only by unanimous voting, which weakens the position of Parliament. That contrasts with the fact that Commission recommendations, in certain circumstances are passed by majority voting within the Council of Ministers.
The Dutch have been very good in respect of the European Community. They are currently suggesting that each member state should agree that they will never support the unanimous vote on a decision in the Council of Ministers unless it has the support of the Parliament. That is a very moderate proposition. I hope that that is the sort of proposition that the Government would be prepared to agree to.
I should now like to refer to the two amendments. There is a damp amendment and a dry amendment.

Mr. Cash: The hon. Gentleman referred earlier to his position as spokesman for the Liberal party. Are we to understand, from the reply that he gave to an earlier intervention, that he is to explain the position of the alliance in respect of this Bill? No representative from the Social Democratic party is present and it would be a matter of real interest to have some idea where the alliance stands in relation to a Bill which is so important to the United Kingdom.

Sir Russell Johnston: Firstly, the absence of members of the Social Democratic party shows their confidence in my good self. Secondly, it is clear that the attention span of the hon. Gentleman is somewhat short. If the hon. Gentleman searches his memory, he will recall that he has asked me the same question many times before and I have given the same answer time after time. I have told him that, if he goes to the Library and finds a copy of the alliance manifesto for the European election of 1984, he will find all the answers that he wishes. I will not say any more than that.
I disagree with the first amendment, but I am disappointed with the second amendment. It contains the words
whilst accepting the need for a Bill which enacts the Single European Act, without eroding national prerogatives or changing the substantive balance of powers between the Community institutions".
One cannot have that. That means no change. Unfortunately, I am speaking before anyone has had the opportunity to speak to the amendment. I shall be very interested in what they say because I cannot understand what the amendment adds to or substracts from the Government's proposal.
The outright nationalistic amendment in the name of the right hon. Member for Taunton seeks to do two things. It states that the Bill

undermines the national right of veto.
We have been over that old story repeatedly. We cannot expect to achieve an internal market if we sustain that position. What is the national interest? Unless Europe becomes a political Europe rather than a nationalist compromise, it will never achieve coherent political positions. I suggest to the right hon. Member for Taunton that to say that one's attitude to agriculture, fishing or industry is determined primarily by whether one is British, Italian or French, rather than by whether one is a Liberal, a Conservative or a Socialist, is to talk political nonsense.

Mr. Bill Walker: The hon. Gentleman has been consistent and, at times, courageous. He will remember that one of the major platforms during the referendum campaign in Scotland concerned the veto—what it would achieve and how it could be retained. There was no question of it being qualified or watered down. The hon. Gentleman remembers the campaign as clearly and as well as I do. He remembers how a majority of people were persuaded.

Sir Russell Johnston: I never thought that that made any sense. The people who suggested at that time that it made sense have changed their minds. Times change, and there is no getting around that. The concept of a national right of veto presumes that somehow the British view of a political matter is coherent. The Prime Minister says now what our right of veto is, but the alliance might, if the heavens were gentle and understanding, or the Leader of the Oppostion might be in a position to do the same. None of those three would necessarily define a proper national stance. They would simply define a transitory political position in the United Kingdom. If we want the advantages of size and co-operation gained by being a member of the European Community, it is right and proper that we should take political decisions on a Community-wide basis.

Mr. Teddy Taylor: Does the hon. Gentleman, who is a fair person, think that there was a great deal of merit and logic in the comments of my right hon. Friend the Member for Taunton (Sir Edward du Cann)? He said that this was not a constitutional revolution, but that it was wrong to give additional majority powers to the Community before it had solved some of the problems by using its existing powers. Is it not reasonable to say to the Community, "Use the powers to solve some of the problems you have before you come back and ask for more."

Mr. Marlow: That makes sense.

Sir Russell Johnston: The hon. Member for Northampton, North suggests that it makes sense, but that severely devalues its impact upon me. I say to the hon. Member for Southend, East (Mr. Taylor) that the reason that this limited proposal has been made and all the arguments have taken place in Milan, Luxembourg, and so on is that the decision-making processes of the European Community have not been working. More and more decisions are being delayed. The Secretary of State for Foreign and Commonwealth Affairs confirmed that it takes 17 years for the Community to decide on common qualifications for architects.

Mr. Marlow: rose—

Sir Russell Johnston: With great respect to the hon. Gentleman, I must point out that time is passing.

Mr. Marlow: How will that make it easier for us to reach sensible conclusions on the common agricultural policy? What will the Bill do to bring about changes in the nonsensical common agricultural policy?

Mr. Deputy Speaker (Mr. Harold Walker): Order. I remind the House that interventions are made only at the expense of speeches by other hon. Members. A number of hon. Members are waiting to speak. I am making a note of the number of interventions made by hon. Members.

Sir Russell Johnston: The second aspect of the amendment concerns the power of the European Assembly. Those who support the amendment do not wish its power to be extended. They say that the Bill
increases the power of the European Assembly".
If one believes in democracy, one must have an elected body to take care of Community legislation.
I listened with great interest to the speech by the hon. Member for Hamilton (Mr. Robertson). I notice that he has left the Chamber temporarily, but he is represented by his Scottish colleague the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes). Although the hon. Member for Hamilton told us what he would do, he failed to tell us the Labour party's view on Britain's place in the European Community. For a long time, the Labour party bitterly opposed Britain's entry into the Community. It seems to be moving from that position, but is not clear where it is moving to. I say to the hon. Member for Northampton, North, who is an expert on these matters, that it is simplistic to argue that the CAP must be reformed forthwith, but, as the hon. Member for Hamilton stated, institutional reform must be low on our order of priorities. As the old song said, you cannot have one without the other. If CAP expenditure were decreased, an effective regional policy would be required to take care of the problems that would be created. If there is to be a harnessing of economic forces for the creation of jobs, as the hon. Member for Hamilton suggested, fiscal and social harmonisation and common political answers would be required. That issue must be faced. At the moment it is not being faced. It is being fudged by the Labour party.
I agreed with the hon. Member for Hamilton when he castigated the Foreign Secretary for his bland references to political co-operation. The right hon. and learned Gentleman suggested, in the way that he is very good at doing, that Britain has been the country which has taken the initiative to achieve political co-operation in the European Community. That is not true. The hon. Gentleman pointed out, rightly, that it was remarkable that the Foreign Secretary should say that. Admittedly, as a consequence of yesterday's ministerial meeting, the Foreign Secretary was able to announce some progress regarding Libya. The events leading up to that were not indicative of a proper degree of co-operation. South Africa's position was quoted. UNESCO was a classic case in which all our European colleagues were saying "No". In my view, there was no proper form of consultation. That seemed to be incredible. We must work these things out in a more satisfactory way.
The Single European Act contains no timetabling procedure. The Council tries to agree on a position but if it is unable to do so, it puts it off. Very often, there is no need to use a veto. It is the prospect of its use that creates the delay. I believe that the European Parliament was

right, in the Spinelli draft Act, to argue for a firm timetable on decision making. A timetable is essential if these matters are to be speeded up.
The right hon. Member for Taunton said that we are moving too fast. I think that we are moving too slowly. Although my colleagues and I will support the Bill in the Lobby if there is a Division, we make it clear that we would have liked much more and we shall continue to press for much more.

Mr. Michael Knowles: The hon. Member for Hamilton (Mr. Robertson), the Opposition's Front-Bench spokesman, spoke about splits between the United States and Europe. That is hardly surprising. At one time, there was talk about the twin pillars of the Atlantic Alliance, but the reality is that there is one pillar, the United States, and a pile of building blocks on this side of the Atlantic. That does not resemble a pillar at all. The countries of western Europe do not stand equal with the United States. Until they are united more coherently there will be no need for the United States to treat them as equals.
It is only in unity that Europe has achieved some economic strength. It has been said that Europe has become an economic giant but a political pigmy. There is some truth in that. We have not produced a political institution. However, when the Community has stumbled, all too unwittingly, into various forms of trade wars—even with the United States—it has not always come off second-best. We are strong economically, but we are not strong enough in other spheres. It is only through unification that the Community will be strong enough to have a voice on the world stage and be able to meet the economic challenges from the United States and Japan and the obvious political and military challenges of the Soviet bloc.
Some hon. Members have put before us a will o' the wisp which has long gone—the idea of an independent Britain. We heard faint echoes of the 19th century in, their speeches but that concept has gone. They cannot offer a future independent Britain. Britain and the other European nations will, perforce, be colonies, albeit economic colonies, of the United States and Japan. If the worst comes to the worst, European nations might be political colonies of the Soviet bloc. If we wish to survive, there is no choice but unification.
When my right hon. and learned Friend the Foreign Secretary takes over the presidency of the Council of Ministers he should bear in mind that, to implement the Cockfield report, we should join the exchange rate mechanism of the European monetary system. The time has long passed when we should have entered. I hope that my right hon. and learned Friend will announce that decision when he takes over the presidency, as that would seem a suitable moment to do so. I am prepared to wait another nine weeks for that announcement but it should have been made years ago.
The completion of the single market is important for Britain, especially with regard to services. Implementing Cockfield by 1992 will mean vast changes in Britain and in other Community countries.

Mr. Teddy Taylor: It will not happen.

Mr. Knowles: If my hon. Friend the Member for Southend, East (Mr. Taylor) had his way, it would not


happen. It is possible, but it depends on political will power. My right hon. and learned Friend the Foreign Secretary has made it clear that the Bill is primarily concerned with those necessary changes.
I wish to comment on the speech of my right hon. Friend the Member for Taunton (Sir E. du Cann) who has, unfortunately, left the Chamber. My right hon. Friend exposed some of the underlying attitudes which have led to our difficulties in the Community. He said that he opposed our entry into the Community. My right hon. Friend said that he was not against evolution but against the pace. If the pace was slower we would be at a standstill. The Community's movements are so slow that they are glacier-like.
My right hon. Friend also claimed that Britain is impatient with the Community. That is an argument I have heard before. It is argued that Britain is a practical nation, that we want to get down to the nuts and bolts of things, yet we are linked up with all of these airy-fairy European intellectuals who exchange words. The continental airy-fairy intellectuals have increased their gross national products at a remarkably faster rate than this practical nation has managed to do in the past 40 years. As politicians, we ought to believe that words are important. They are our business.

Mr. Teddy Taylor: Can my hon. Friend tell me of any other area of the world which, in the past three years, has had a poorer rate of job growth—with the possible exceptions of El Salvador and Tibet—than the European Economic Community?

Mr. Knowles: That is because the Community is splintered into 12 separate markets. If one separated the United States into 50 separate markets they would not have had a growth in jobs. If we wish to emulate the job growth in the United States we must emulate their economic structure.
It has been said that Britain should say less about European union to our European partners. That is not true. Its exact import may vary in different countries but it is an aim that is shared by all European partners. We signed the treaty of European union, the object of which, as outlined in the preamble, was to produce an ever closer union among the people of Europe. Britain also signed the Strasbourg declaration. The concept is important and our European partners expect us to deliver on the treaties.
There has been endless mention of the common agricultural policy. The truth about the agricultural policy—this is sure to produce a laugh—is that the agricultural policy has been too successful. Thirty years ago the idea that Europe could feed itself seemed a pipe dream. That is the only area in which we have practised a single market and it is the one area where food costs have fallen and where we have massive food surpluses and problems.
Thirty years ago over 25 per cent. of the people worked on the land. They have been shifted off the land but there has been increased productivity. The success of the common agricultural policy was based on the single market and if we had a single market for our industries we could produce similar results. We must press forward.

Mr. Budgen: Does my hon. Friend have the same idea about stockpiling motor cars? Can he give us his further

thoughts about state aids and subsidies, of which he plainly approves on a European scale, which would resuscitate Britain? I am sure his views will be much appreciated by Opposition Members.

Mr. Knowles: I cannot recall any period in postwar Britain when there has not been some form of state subsidy. Even in that haven of free enterprise, the United States, the biggest single subsidy is given to agriculture. Some of those employed on the land have to be shifted off and that has social consequences. We must pursue an agricultural policy which has social as well as economic aims. That is inevitable.

Mr. Budgen: Is my hon. Friend saying that we do not have a dreadful lesson to learn from the common agricultural policy and that the same principles should be extended to industry? Would he favour doubling the price of motor cars and excluding all imported ones? That would be the result of applying that principle.

Mr. Knowles: One would apply those principles to protect agriculture but not to industry. One uses different horses for different courses. Certain hon. Members claim they oppose the principle of subsidies, but when the industry concerned is in their constituency it is a different matter. I have not seen many hon. Members who will argue that in principle and then face their electorate and tell them that they are in favour of closing their factory down. State intervention can be used, from time to time, to give an industry breathing time to sort itself out.
Successive Governments have used subsidies. Surely nobody is pretending that the United States Government have not used their vast purchasing power to bolster American industry. The Boeing 707 swept the board because the development costs of the B52 bomber were written off. Nobody could compete with that. Those who want to compete at the top end of technology must do what others do, but better. It is nonsense to imagine that we can live in a cocoon. Reality must break in.
I do not accept the idea that any increase in power or influence for the European Parliament necessarily affects Westminster adversely. The power does not reside at Westminster or at Strasbourg. It has disappeared to the Executive in the middle-national Governments, the Commission and a supra-national Council, which is the only legislature that I can think of which meets in secret. It is not a democratic system. I favour the democratic system and would like Strasbourg and Westminster to exercise more control.
Parliament does not influence European matters practically because we do not give the Select Committee the power to do so. I have argued this case before. There are members of that Committee in the Chamber. We have argued time and again that we must reconsider how we scrutinise European legislation. That is especially true in view of the proposed changes. At the moment, the Select Committee considers matters when they are so far down the road that we can do nothing about them. We do not have close relations with British Members of the European Parliament; we do not have the close liaison such as the French and Germans have. The House loses as a result. We fail to influence European affairs to the country's benefit because we are bound up with petty jealousies.
In France, for example, a Deputy from the French National Assembly may become a Member of the European Parliament, return to Paris as a Minister and then


go to Brussels as a Commissioner. The two institutions are closely knit. A line is drawn between the two in British politics. What happens in France might be called patronage but it protects French interests. I am in favour of protecting British interests. We must be realistic. We should not lock ourselves in a cupboard, put our hands over our eyes and say, "The bogy man will go away." The world is not like that.
Can my hon. Friend the Minister assure us that the Government are willing to reconsider the powers and status of the Select Committee? That has become an urgent matter. We must grapple with realities. All too often, we trample over the ground that we have trampled over ever since we entered the Community. Other countries have moved on. Their political perspectives are shifting. If we are not careful, we shall be left behind wondering what everyone is talking about and why they are impatient with us.

Mr. Dykes: As this applies to economic and political issues—

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The hon. Member must address the House. I cannot hear what he is saying.

Mr. Dykes: I am sorry, Mr. Deputy Speaker. I was trying to decide which way to face.

Mr. Marlow: You always are!

Mr. Dykes: I now realise that I should not have said that.
My hon. Friend the Member for Nottingham, East (Mr. Knowles) is speaking persuasively about political and economic co-operation. I am sure that many hon. Members agree with everything that he has said. Does he agree that it is ominous and nerve-racking for Britain that, because of the failure to get stuck in and to work to create a strong Community, Italy has, for the first time, overtaken the United Kingdom, whereas it was always the weakest of the big four? Is that not a good example of a country seizing its opportunities and doing well economically and politically because of political will?

Mr. Knowles: My hon. Friend is absolutely right. That has happened before and it will continue to happen. Britain must accept that it made a decision about its future when it entered the Community. We should stop haggling in the corner over private quarrels and ensure that the Community works and that we get benefits out of it.

Mr. Eric Deakins: I listened to the hon. Member for Nottingham, East (Mr. Knowles) with increasing incredulity. His was the first openly federalist speech of the day, although we have had a few others in previous debates. I hope that, when the hon. Gentleman loses his seat at the next election—he has a marginal—he may have done himself some good with the British European movement.
The Government admitted last year that the Bill would not have been necessary if they had not been defeated by the increasingly federalist sentiment which guides some of our colleagues in the EEC. I am not sure whether it was inadvertent or deliberate, but the Government seem to have been blind to the growing trend towards federalism and integration in the EEC.
I tabled a written question to the Minister's predecessor on 8 May 1985 asking about the phrase "European

integration" which had been used in a Government document supplied to a summit meeting in June 1984. The Minister replied that the phrase denoted co-operation of EEC states. A Minister who cannot distinguish between integration and co-operation is either stupid or trying deliberately to mislead. In view of that Minister's reputation, I shall leave the House to decide.
The Government are accepting a further loss of sovereignty by the extension of majority voting. We no longer have faith even in the Luxembourg compromise—the so-called veto—which might have existed before last year's events. We had one defeat on the use of the Luxembourg compromise in April or May 1982 concerning CAP prices and the link with our budget contribution. We were outvoted and refused use of the Luxembourg compromise. That was a defeat for Britain at the hand of other members of the Council.
There was a more serious breach in the Luxembourg compromise concerning the CAP price negotiations last year. The Germans vetoed a cereal price reduction whereas, under the rules, cereal prices for the previous year should have been continued. The veto was overruled not by other Council members but by the Commission. The Commission arrogated to itself the right to overrule a veto in the Council. That is even more disturbing than what happened in 1982.
The Bill also accepts a great extension of competence to the EEC. I am surprised that nobody but the Foreign Secretary has mentioned that. If the Bill is passed, the Community will have competence in environmental matters, in research and development and in other areas which until now have been outside its area of competence, as laid down in the basic Community treaties. The extension of Community competence has a rachet effect. Its competence must be at the expense of the legislative and economic competence of individual member states. When powers have been given up they can never be regained—at least, not so long as one remains a member of the Community. The rachet effect is one of the great disadvantages of the Single European Act and of this Bill which gives legislative effect to it.
The Bill also gives more power and, what is even more important, more status to the European Assembly. The treaty of Rome referred in many instances to the Commission and the Council consulting the Assembly, but the words that are now used are "in co-operation with." Those words must mean something. There has been a change in the wording, which will enhance the status and the powers of the Assembly.
Last, but by no means least, in this Bill the Government accept the idea that indirect taxation should be harmonised under article 17. There is a qualification: that that harmonisation must be essential for the workings of the internal market. But what form of indirect taxation is not essential to the workings of the internal market? Every form of indirect taxation is essential. Therefore, the qualification is no safeguard. The Bill accepts, as does the Single European Act, that ultimately there shall be harmonisation between member states over indirect taxation. I am surprised that the Chancellor of the Exchequer has agreed to it.
As for the change of name of the Assembly, Conservative Members ask, on behalf of the federalists both inside and outside Parliament, "What's in a name?" Right hon. and hon. Members have forgotten that the name of the Assembly was changed by the European Parliament


in a resolution of 31 March 1962. Because of their federalist leanings, that change was recognised gradually by the other institutions. However, what would be the reaction if the European Council of Ministers took it upon itself to change its name to the European Cabinet? Would right hon. and hon. Members adopt a sanguine attitude towards that change of name? Of course they would not.
Names have a meaning. They are also symbolic. The symbolism involved in changing the name is probably more important than the immediate practical effect. The Assembly, which is now to be called officially the Parliament, will try to arrogate to itself the powers of a real Parliament as distinct from the Assembly's present advisory and supervisory role under the relevant section of the treaty. I shall continue to take the advice of the former Minister of State, Foreign and Commonwealth Office on how to use these terms. In reply to my written question about the terminology on 15 March 1984, he said:
Whatever terminology is used, the nature of the institution is not affected. We shall continue"—
that is, the Government—
to use the term 'Assembly' in legal texts or"—
I put emphasis on this—
where it is necessary to distinguish that institution from the Westminster Parliament."—[Official Report, 19 March 1984; Vol. 56, c. 340].
When this institution has changed its name officially to "Parliament", it will be even more necessary to use the term "Assembly" in our debates to distinguish it from the proceedings in this House of the Westminster Parliament.
The Assembly has been granted a large number of new powers. However, it is not a responsible Parliament, such as the national Parliaments of the member states. According to its record, it is a most irresponsible body. Last year it passed a motion that rejected the idea of budget discipline in the EC. This year it could not agree upon any form of reform of the common agricultural policy. It produced a document that was eventually voted down, but that document was shot through with contradictions. During the agricultural price review debate last year in the Strasbourg institution, the Assembly argued for a 3·5 per cent. average increase in agricultural prices. That was at a time when even the federalists in this Chamber accepted the need to rein in the financial effects of the expansion of the CAP.
The Assembly is looking for a high profile role. It is increasingly bloated with its own pretensions. I refer to its attitude to the Single European Act which was grudgingly accepted as the minimum. It was probably very much in tune with the comments of the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) who, quoting from the proceedings of the Liberal assembly on the European basis, said that this is a very small step indeed.
Much more significant about the Assembly's pretensions is its attitude to the 1986 Community budget. It rejected the Council's budget and tried to arrogate to itself the power to increase expenditure. That is outside its powers under the treaty of Rome. It is also outside its power under the Single European Act. Furthermore—this was an even more heinous crime on its part—it tried to arrogate to itself the power to increase the rate of VAT from own resources within the 1·4 per cent. ceiling and the power to determine the taxation of individual citizens in member countries. The House debated this matter a few months ago, and I shall not go into the details.
However, it shows the nature of the institution. It wants there to be more expenditure and to get its hands on taxation, but it does not yet have those powers.
My last word on the Assembly, at least in this debate, is that we are seeing the beginning of a struggle between the Assembly and the Council, with the Commission openly backing the Assembly in its desire to get more power away from the Council and, therefore, away from national Parliaments, particularly over financial control. The same kind of struggle took place in England during the later middle ages. There was a struggle between the English Parliament and the Crown over the one vital issue that involved power in the community and its society, the power of taxation. That struggle was eventually won by the English Parliament. We must hope that there will be a different outcome to the struggle that is now beginning in the European Community.
The Bill gives great encouragement to the federalists in our midst and outside. The federalists are not just the people on the fringe. When Mr. Gaston Thorn was President of the European Commission he made a speech to the European Assembly in February 1984 in which he said:
Parliament's role in decision-making is not commensurate with the legitimacy the direct elections gave it. Parliament is an expression of the deep-rooted aspirations of the people of Europe. As such, it should have a much larger say in policy-making. I would like to see it sharing legislative and budgetary powers with the Council.
The federalists in this Chamber will applaud those sentiments. However, those right hon. and hon. Members who do not wish the EEC to follow a federal direction but who believe that this is inevitable unless it is strongly resisted in this country and in other countries will take careful note of that warning.
There is also a passage in the Dooge report that was opposed by the Minister of State at the time. It says:
A Parliament elected by universal suffrage cannot, if the principles of democracy are logically applied, continue to be restricted to a consultative role or to having cognizance of only a minor part of Community expenditure. That dooms it to oblivion or over-statement, and more often than not to both.
The Minister entered a reservation, but it was only a technical reservation. In the light of the Bill and the Single European Act, I believe that a majority of the Cabinet and the Government are convinced that gradually we should go down the federalist path, but that we should not speak too loudly about it for fear, to quote the Foreign Secretary's rather offensive words, "of putting terror into the children".

Mr. Cash: Recently, in reply to the right hon. Member for Chesterfield (Mr. Benn), my right hon. Friend the Prime Minister said:
I do not believe in the concept of a united states of Europe, nor do I believe that it would ever be attainable."—[Official Report, 5 December 1985; Vol. 88, c. 432.]

Mr. Deakins: I accept that. I too have that quotation. The Prime Minister may have said that, but I am afraid that she has said many things about her attitude to the EEC and in the course of time we have seen that she has changed her views. The Milan summit was a classic example of that.
My third point of caution about giving encouragement to federalists in the Bill relates to the draft treaty of union which was considered by the Assembly not so long ago. I shall not weary the House by reading out some of the appalling—

Dr. Norman A. Godman: The distinction that my hon. Friend makes between an assembly and a parliament might be seen as a confusion between the two by other hon. Members. Would that confusion be worsened when we obtain an elected Scottish legislature if it is called an assembly or a parliament?

Mr. Deakins: The Referendum Act 1975 referred to an "assembly". That would not have led—I see Scottish Members assenting to that proposition—to any confusion at all. If there are parliaments in different parts of the same institution, there is bound to be confusion between them regardless of their legislative and financial roles.
Let me mention briefly the draft treaty of union, which is horrifying. It has been rejected, but nevertheless it is, so to speak, in the wings waiting for a favourable moment to come forward. I do not agree with the right hon. Member for Taunton (Sir E. du Cann) who finds the pace of change too fast. I look at the destination and say that I do not want to get to that destination. I suspect that the majority of the British people, given the opportunity, would say the same.
There is nothing in the Bill to improve parliamentary control and scrutiny of Council decisions and treaty-making. I refer the House to the 16th report of the House of Lords Select Committee on the European Communities in Session 1984–85, where that point was hammered home. I cannot believe that hon. Members would regard the other place as being a radical institution. Nevertheless, it said some excellent things about the inadequate nature of our scrutiny in the House. We also have the report of our Select Committee on European Legislation.
The Single European Act talks about harmonisation of external policies. It would be a serious mistake—I shall not necessarily carry even my hon. Friends with me on this—for us to co-ordinate our external policies with a club of rich nations, which they certainly are. That will not resolve the world's north-south problems. It would be much better to give greater prominence to using the Commonwealth in tackling those problems. Unfortunately, the Commonwealth is sadly neglected by all parties in the House and that is a pity.
What matters is not the military, economic or political power, as the Foreign Secretary and those who support him would have us believe, which lie behind particular policies, but whether a policy is right or wrong. If it is right it must be put forward irrespective of the power that one has to put behind it. The worst of all possible worlds would be to have policies that are decided by consensus in the Community. As we know, all convoys proceed at the pace of the slowest ship. I am afraid that those policies are just as likely to be highly inadequate or wrong as they are to be right.
This political co-operation is the politics of declaration. There have been about 30 declarations in recent years and they have had no perceptible impact on the course of world events. It is the politics of gesture by countries unwilling to accept their declining influence in the world. Incidentally, I accept that concept because Europe cannot go on dominating the world for the next few hundred years in the way that it has in the past 500 years.
My last comment is to my party. Our continued membership of the EEC, the Bill and what is involved in it, threaten the economic programme of the next Labour

Government. There can be no restriction on capital movements. I refer hon. Members to the amendment to article 70 in the Single European Act. There will have to be a reduction of state aids. There can be no import control policy and there certainly can be no managed trade policy which would involve negotiations between this country and others in Europe or elsewhere. Our economic and financial policies will be subject to much greater interference, and indeed some of them will be set completely at nought by our continued membership and by the Bill. That is why we should all oppose it tonight.

Several Hon. Members: rose—

Mr. Deputy Speaker: Order. I have decided not to enforce the 10-minute limit, but if speeches are as long as they have been a good number of hon. Members will not be able to speak. Therefore, I ask for voluntary restraint.

Mr. Geoffrey Rippon: I welcome the Bill and the way in which it was introduced by my right hon. and learned Friend the Foreign Secretary. I must confess that I have heard some of the speeches which have been made this afternoon before. I am not surprised that my right hon. and learned Friend was right when he said that anxieties would no doubt be expressed about the concept of European union.
European union means different things to different people, and it is hard to define. Reference has already been made to the preamble to the treaty which states simply, and commits us to,
an ever closer union among the peoples of Europe.
That is something that I have always believed can only be achieved step by step with realism. There is no question in our minds of European union, or movement towards European union, meaning, ipso facto, the creation of a federalist state. Last year's report on European union presented by the House of Lords European Communities Committee rightly emphasised that that union, in the sense in which we talk about it and commit ourselves in the various documents, is not about some Utopian plan for a European federation. It is about how best we can, step by step, realistically bring about the aims of the Community so that its future success is assured.
I should have thought that all hon. Members could accept what my right hon. and learned Friend had to say in introducing the Bill and stating its purpose. It is simply to deepen and broaden the scope of European activities, to our mutual advantage. We do that in every sphere in which it is to the advantage of all the members of the Community to co-operate, because what they do together they can do more effectively than what they attempt to achieve on their own.
Of course, in that context it is right to review from time to time the provisions of the treaty of Rome. As General De Gaulle once said, treaties are like roses; they fade, they fade. The negotiation of an entirely new treaty of European union, which some have advocated, would have been doomed to disaster. That, as I understand it, is what our Ministers were saying at the time people were talking about a comprehensive new treaty. That is quite a different thing from the arrangements which were agreed at Luxembourg and which are to be embodied in the Bill.
The practical steps which were envisaged at the Luxembourg summit and are embodied in the Bill are both possible and useful. I warmly endorse what my right hon.


and learned Friend had to say, that the provisions in the Bill are admirably drafted to serve British interests no less than those of our European partners. There is nothing in the arrangements in Luxembourg, nothing in the Bill, which can do other than benefit the British interests that our Government have been seeking to protect within the Community.
Three areas of action will particularly benefit the United Kingdom, increase trade and so create jobs. First, I cannot understand how anybody could not welcome a timetable for the establishment of a genuine internal market in services as well as goods. It is perfectly obvious that we in the United Kingdom would benefit enormously from access to the Community markets for our various financial services, house mortgages, insurance and such matters. That access is bound to help us in every possible way.
Secondly, we must welcome the prospect of speedier and more effective decision-making. Finally—I attach special importance to this—we must welcome action to make Europe competitive in the new technologies. If, as the hon. Member for Walthamstow (Mr. Deakins) implied, that is widening the competence of the Community, so be it. The Community should be directly concerned with increasing European and therefore British competitiveness in new technologies and with the protection of the environment. The Opposition have made much of the importance of the environment and I recall my hon. Friend the Minister saying in March that pollution knows no frontiers. I should have thought that we would welcome European co-operation in those matters.
These are matters of common sense. Another matter of common sense from the British point of view is that, if we are to complete the internal market by 1992, it is essential that we increase the use of qualified majority voting.
As my right hon. and hon. Friends have explained, unanimity is still required for tax measures or such matters as movement of people or animals. It is important to emphasise that there are the safeguards that we need; for example, to protect an island against the introduction of rabies. Above all, as my right hon. and learned Friend the Foreign Secretary said, the so-called Luxembourg compromise—or the Luxembourg disagreement as some people have called it—for what it is worth, will remain as it is.
There may be arguments about the circumstances under which that agreement may be used. Some people may say that it has a legal frailty or that it did not cover—and I believe that it should not have covered—cases in which the veto was used for a purpose other than one which was under consideration. In other words, the veto should not be used to stop one policy simply to promote another. That is probably a misuse of the veto. However, that facility is present and it is there to protect a very important national interest. That must be a matter for argument from time to time.
The Bill and the agreement in Luxembourg are important steps to avoid unreasonable blocking of measures to liberalise trade or to introduce what many of us want—reforms in the operation of the CAP.
I was especially disappointed in the points made by the hon. Member for Walthamstow about increasing the competence of the Community in areas such as technology and the environment. If the Opposition believe in the

speeches that they have made outside the House on these matters, they should be welcoming the provisions which increase the possibility of increased trade and create jobs and also increase the quality of life of the citizens of Europe.
Since when has the Labour party become so obstinately isolationist that it cannot even support measures to improve the quality of life and the environment? The tragedy of the last generation is that Europe has been slow to recognise the importance of scientific and information technology for economic development, growth and the creation of jobs. More than 20 years ago, I remember expressing my anxiety that, if we did not press at the very frontiers of science and technology, we would end up flogging hand-knitted Union Jacks to tourists.
I also remember as the Parliamentary Secretary to the Ministry of Aviation sending to the then Prime Minister, Mr. Harold Macmillan, a United States report on space research which began: "This is no astronautic boon doggie." That was a curious phrase but it was the one that was used. The report stressed that there was a spin-off in advanced technology—for example, in computers. My hon. Friend the Member for Southend, East (Mr. Taylor), who intervenes in these matters, suggested that Concorde was a waste of money. However, if we had not produced a Concorde we would be even further behind in advanced technology.
The first minicomputer was produced 23 years ago. The United States and Japan immediately recognised the importance of that new technology. We have followed on, but we have all, especially the Opposition, tended to regard technological change as a threat to job creation instead of an opportunity for industrial and economic growth.
I was very encouraged when the European Council at Milan last year gave the go-ahead for the creation of a European technological community. The Council favoured
A close link between technological development and the effort to unify the internal market.
The Luxembourg package and the Bill take that idea a step further. There is now a better understanding that priority must be given to improving conditions for cross-frontier co-operation between companies in research and development.

Mr. Teddy Taylor: Before my right hon. and learned Friend progresses too far on his points about technology, would he clarify his comment about the Bill helping to solve the problems of the CAP because of majority decisions? I understand that the Bill makes no change to CAP decisions and that on many of the issues, for example price-fixing, there is already majority voting.

Mr. Rippon: If the Bill makes no change, there will be no need for my hon. Friend to oppose it. I said that there is no change in the Luxembourg compromise but I hope that the arrangements that were agreed in Luxembourg, for which the Bill provides the foundations, will avoid the use of blocking precedents of the kind employed by the German Government last year.
The Bill puts down a marker that there should be a general understanding between Community members that the veto should be used only when there is a very important national interest involved.
I also welcome another matter to which the Government have given priority. That is the way in which


the Commission and the Council have emphasised the importance of social and regional progress. Some reference has already been made to this and I believe that the development of the regional and social funds has been very important to the United Kingdom and especially to the north-east. Those who suggest that the Government have neglected those aspects of our interests are quite mistaken.
Measures are also needed to protect the environment, and fundamental freedoms and rights and to advance social and educational policies. Within that broad context, I welcome the proposals to give the European Parliament an increasing role in the European partnership.
The change of name is not of immense significance. As my right hon. and learned Friend the Secretary of State said, it recognises what has been happening, in that it is already called the European Parliament, although it does not have legislative powers. Earlier this month, at the Inter-Parliamentary Union conference, a proposal was put forward for a central American parliament. A legislative assembly was not contemplated. Instead, they wanted somewhere that Members of Parliament could discuss matters of mutual interest.
Whether we have an Assembly, a Parliament or a European Congress, its influence and powers will evolve in time according to whether it behaves sensibly. This House might have more influence and therefore more power if it occasionally conducted its affairs more sensibly. A parliamentary influence depends on the quality of debates. That is why the other place nowadays has a higher reputation in many quarters than we have.
The Bill simply changes the name, having regard to reality. It does not give greater powers. We can argue again about whether there should be co-operation or consulation but there will be better co-operation between the Council, the Commission and the Parliament if there is earlier consultation. One of the Parliament's troubles so far has been that matters come to the Parliament so late that its reactions tend to be negative rather than positive. If it could be consulted earlier, and brought into matters at an earlier stage, it would have a more useful role to play and would be more effective.
It is not disputed, as the Scrutiny Committee's report states, that
at the end of the day the European Parliament still has no power to insist and the last word remains with the Council.
The European Parliament will be listened to by national Parliaments only in so far as it uses its new influence successfully. In that sense, influence can lead to power.
In the course of a splendid and comprehensive speech on 5 March, my hon. Friend the Minister of State said:
The third major area covered by the new treaty amendments is the environment … Pollution knows no boundaries."—[Official Report, 5 March 1986; Vol. 93, c. 340.]
In that context I emphasise that there are many other matters where we should recognise that our horizon cannot and should not be limited by the boundaries of the European Community. I have never regarded Europe as the Europe of the Nine, the Ten or the Twelve. I regard the Council of Europe and its parliamentary assembly as the parent body.
It is important in our debates on Europe that we do not continue going over the old and stale ground of definition of terms. We must show that we as a country are concerned about the development of the European Community and of the other members of the European family. For

example, we should not forget our partners in EFTA, bearing in mind that one of our reasons for joining the Community was to protect EFTA's interests.
Damage will be done and a danger will be posed in future if members of the European Community become so obsessed with their own economic problems and progress towards union or integration, however it is defined, that they neglect the wider Europe. We should not allow Europe to be split in two with a widening gap between states that are members of the Community and those that are not.
The Council of Europe, starved though it is of adequate financial resources, has a vital contribution to make in legal, social, education and cultural matters. I hope that we shall spend more time talking about the ways in which the Council of Europe and the European Community co-operate.
The parliamentary assembly of the Council of Europe now provides the widest, indeed the only, European institutional framework, where elected Members of national Parliaments can meet and have discussions. The views of some Opposition Members might be changed if occasionally they talked to other European MPs and understood what they were trying to do in the European context.
I welcome the Luxembourg package and the Bill. I only hope that we never forget that what we are doing, to use Jean Monet's words, is to unite not states but people.

Mrs. Ann Clwyd: As a former Member of the European Parliament, I cannot feel the same passions as some hon. Members on both sides of the House about the name of the institution. I find it extraordinary that so long after joining the European Community we are still arguing about whether the institution should be called an assembly or a parliament. The French have their Assembly, the Americans have their Congress and, as the right hon. and learned Member for Hexham (Mr. Rippon) said, there are other names which define various organisations throughout the world. I find it incredible that some in this House spend so much time arguing about what we should call the European Parliament.
As a former Member of the European Parliament, I should like to see it have more powers. I do not understand why we continue to argue in this place about the European Parliament's role. We should remember that its Members are elected as we are. If we believe in democracy, we must believe in giving powers to politicians who are democratically elected. It is inconceivable that anyone who has been elected to this place should argue about whether someone in another place should be given certain powers.
The European Parliament is criticised; it is said that it does not act in the right way, that it is too slow to react and that it does not make the right decisions. I find these criticisms strange. We cannot urge a horse to gallop while hobbling it at the same time. However, that is precisley what some hon. Members would like to happen. They wish to continue to criticise the European Parliament while constraining its powers.
I remind hon. Members on both sides of the House that there is a clause in the treaty of Rome which supports the


redistribution of wealth between rich and poor. That was never contained in the EFTA treaty, of which we used to be so proud.
There are those who continue to talk about what we should do when we leave the European Community. I know that they do, but I should like to know what the options are. I should not like Britain to rejoin EFTA. We may be a long way from the goal of redistributing resources between rich and poor in the European Community, but there is a deal for that among many Members of that Parliament. If the European Parliament were given more powers and some of the Council's powers were taken from it, progress would be made.
Members of this place who were formerly Members of the European Parliament will remember working with parliamentarians of other nationalities from day to day. I can assure the House that that is a sobering experience. Initially I was opposed to the European Community, but I found after a period as a Member of the European Parliament that there were advantages in working with people of other nationalities from day to day. I wish that more Members of this place had had that experience; I shall be eternally grateful that I had it. It had a profound effect on me and it changed my attitudes towards the European Community.
As a member of the Socialist group, I had an advantage over members of some other groups. That is because the members of the Socialist group worked with parliamentarians from 10 countries. I shall be responsive, Mr. Deputy Speaker, to your appeal for short speeches and the constraint on time, because I remember that it was necessary to fight for the opportunity to speak for only three minutes in the European Parliament. The representatives of the other nations wanted to speak in almost every debate, and to come to this place and to be able to speak at length was a great luxury.

Sir Anthony Meyer: I am listening with immense interest to the hon. Lady's remarks. Does she agree with me that one of the sad features about the Labour party, which I criticise in many respects, is that it is no longer dedicated to the internationalist ideals which used to command universal respect? Nothing is sadder than to find that the hon. Lady is a relatively isolated voice among those on the Labour Benches.

Mrs. Clwyd: People in glasshouses should not throw stones. The speeches that I have heard this evening from Conservative Members do not give me cause for any enthusiasm. Some of the opinions that they have expressed have not coincided with mine. Perhaps the hon. Gentleman should do some missionary work among his right hon. and hon. Friends before starting on mine.
I do not know why Members of this place are still so sensitive. Is it because we are conscious of the fact that we are criticised by many for comprising one of the most ineffective legislatures in western Europe? Is it thought that the European Parliament might become more effective than the Westminster Parliament? I believe that in 20 years the European Parliament will be more important than the House of Commons.
I agree with the Secretary of State for Foreign and Commonwealth Affairs that our national goals can be achieved only in co-operation with others. I believe strongly that we must co-operate with people from other

countries. We talk about controlling multinational companies, but how can one country on its own control the strength of the multinationals? It is only by co-operating with other countries that we can exercise that control. The Council of Ministers missed a good opportunity to exercise that control when it voted down the proposals that were advanced by the Parliament and the Committee of which I was a member for five years. Had that legislation been voted through it would have meant that workers in multinational companies could have had much more information about the way their companies operated.
So it is conceivable that some of the aims which we support can be achieved. In many areas of foreign policy, for example, I found that the European Community was much more sensible in its approach than I have found the House of Commons to be in the two years that I have been here.
Earlier this year, the states of the Community raised the level of their subscriptions to the club. What I have said already does not mean that I am uncritical of the European Community. Indeed, I am extremely critical. It has been a goal of the European Community for some time to control agricultural spending, but somehow, because of the actions of the Council of Ministers, I believe, that goal has not been achieved. As regards the budget compromise, which has been much praised by Government Members, some four weeks after the subscriptions were raised we got an inkling that there was not enough to pay for the rapidly rising costs of the organisation.
If the bleak picture drawn by the budget Commissioner in Brussels recently is correct, spending cuts are obviously on the way. These will have to come from the social and regional funds, youth training, job creation or industrial research programmes. We benefit greatly from the social and regional funds of the European Community and it is a great pity that those funds are such a small percentage of the total budget spending of the Community. If we could control agricultural spending, obviously this country in particular would benefit.
The figures also show that the much-hailed system of budgetary discipline agreed by EEC Finance Ministers in 1984 to control the growth of agricultural spending and keep it below the overall growth in EEC revenue is all too easy to breach. The idea is constantly bandied about that the EEC and its institutions are hopelessly spendthrift, restrained only by the valiant efforts of the Secretary of State and his colleagues. But the Community is made up of 12 member states and its budget is directly the result of their decisions. The Commission is only the bureaucracy which tries to put the policies into effect, and occasionally suggests policies.
The European Parliament as it is at present is only a sop to democratic control. It can add only a small amount of extra spending at the margins. It cannot do anything about the vast bulk of the budget, and above all agricultural spending. The budget crisis which is likely to land on us yet again is, I suggest, the result of years of fudged compromises in the Council of Ministers and of a failure to co-ordinate the policies of the different national Departments involved.
The Financial Times, in a very good article on "The crisis that never went away" a few weeks ago, said:
The Council perpetuates the legal myth that it is somehow united and indivisible. In reality, it is a machine of ill-fitting cogs often working in competition rather than co-ordination. The unhappy consequence is the annual budget, invariably negotiated


through the night by junior treasury Ministers who have been known to make wild and foolish compromises in the early hours in the faint hope of getting to bed.

Mr. Rippon: As they do here.

Mrs. Clwyd: I would suggest that that is not true of the European Parliament, the Members of which work together on a day-to-day basis over a long period. I believe that the objective of compromise and of reaching some sort of sensible control of agricultural spending is much more likely to be achieved in the European Parliament than in the Council of Ministers.
In other ways too, Britain is being proved a nation of idiots, and male chauvinist idiots at that, with humiliating regularity in the European Court of Justice. The latest instance, of course, was the judgment of the court in favour of plain common sense—more evident there, apparently, than in the corridors of power here. The judges agreed that forcing a woman to retire at 60 or 62, against her will, from a job in which a man would be allowed to stay until he was 65 is discriminatory and against EEC rules.
That was only one of a string of judgments which show that, however liberal and far-sighted the equal pay legislation and the Sex Discrimination Act were when they were introduced more than a decade ago, it is now time to look at the legislation again. The legislation at present going through the House of Lords is not going to achieve this aim. The alternative is to face continuing ridicule in the European Court of Justice, because Britain has appeared before it on sex discrimination issues more times than any other EEC country.
Last year the EEC initiated a programme to promote equal opportunities for women, noting that, despite past efforts at Community and national levels, inequalities in employment still existed in practice and might well be exacerbated in the present crisis conditions.
I want to take up briefly the point made by my hon. Friend the Member for Hamilton (Mr. Robertson) about the EEC directive on parental and family leave. For me one of the worst times in the two years that I have been in the House was the evening when we discussed that directive on the Floor of the House, and the way in which the spokesperson on this matter was ridiculed by some Government Members. The subject of equal rights was discussed many times in the European Parliament and I never heard the kind of remarks that came from the Government Benches on what is a very serious subject on which progressive legislation was being proposed. That says something for the European Parliament as compared with the House of Commons—but then, of course, there were more women in the European Parliament and it would have been more difficult to ridicule women there than it is, apparently, to ridicule women in this House who make sensible contributions to debates.
I therefore urge the Minister to look again at this matter; I am sure that she will be sympathetic. I have had many letters asking the Government to look again at the proposals for parental and family leave. Parental leave is time off work for either parent following the end of maternity leave to care for a child under the age of two. That leave is becoming increasingly available in other EEC countries. From January 1986, nine EEC countries will have some form of parental leave. In two member states, West Germany and Belgium, parental leave and sabbaticals have been established not only to strengthen

family life but as a way of reducing unemployment—something which I thought might be rather attractive to this Government—parents on leave being replaced by unemployed workers. It is estimated that in West Germany, when parental leave comes into effect fully during this year, one-year contracts may be given to 200,000 people currently unemployed.
I urge the Government to look again, so that we do not again look ridiculous among our EEC partners, at the subject of parental leave. This is a progressive reform, as have been many of the reforms in the European Parliament over the years—on equal rights, on environmental issues and on other social and employment issues—which have helped workers throughout the EEC.
I support the hon. Member for Nottingham, East (Mr. Knowles) who was on the Select Committee on European Legislation. I had hoped that that Committee would properly scrutinise EEC legislation, but it does nothing of the sort. It simply rubber-stamps a succession of documents without any proper discussion on the merits of the proposals. It is left to the other place properly to scrutinise EEC legislation. When I was a Member of the European Parliament I was grateful for the excellent reports produced by noble Lords in the other place. I hope that our own Select Committee can become more relevant. If we believe in the proper scrutiny of EEC legislation and want to influence that legislation, we should have proper discussions about it in our Select Committees. We are abdicating our responsibilities if we do not take up that challenge.

Mr. George Gardiner: I listened to the speech of the hon. Member for Cynon Valley (Mrs. Clwyd) with great interest. I disagree with many of the things that she said, and I certainly disagree with her eager anticipation of the future powers of the European Parliament. I also differ from her in her assessment of the relative importance of the European Parliament and the Council of Ministers. However, her ready understanding of the need for much closer co-operation in Europe and her recognition that this must involve some compromise on all sides came as a breath of fresh air from the Opposition Benches and certainly sets the hon. Lady apart from the contributions made by some of her hon. Friends.
I shall not follow the hon. Lady further than that, because I should like to speak about one aspect of the Bill—the proposed limited extension of qualified majority voting that will enable the Community to meet the 1992 target date for completion of the internal market.
In our discussions on Community matters we speak on several levels. We sometimes speak of ideals, and we also discuss practicalities. I have great respect for those who regularly expound the ideals, but it is perhaps more useful for us to concentrate on the practicalities. My hon. Friend the Member for Southend, East (Mr. Taylor) tries hon. Members with his humour about their being Euro-fanatics. I join in the fun, but I hope that I am not counted among them. It is our duty not to indulge in great flights of oratory in favour of pie in some European sky. We should approach matters in a pragmatic British way.
We all acknowledge that in some spheres our membership of the Community works against us. It is commonplace for us to attack the size, importance and operation of the common agricultural policy, the foundations for which were laid long before we became


Community members. By and large, the CAP has not worked in our favour, although one notes the efforts now being made by our Government and others to bring its spending and its budget under control. It is still a colossus built on principles and priorities that were established in the Community before we joined.
If we are to take a pragmatic approach, surely we should be throwing all our energy and our arguments into developing those aspects of the European Community that will work significantly to our advantage—if they are allowed to develop. In that respect we come once again to what is often commonplace in our discussions, the desirability of creating a genuine common market of the kind that so many of our people thought we were joining, a full internal market. That is why we have the programme upon which members have embarked to scrap all non-tariff barriers before 1992. The achievement of that target is essential for our industrial and commercial survival, and it is just as essential for the other members of the Community.
It is interesting to note when comparing the home markets in the world how the home market that we have created in the Community is vastly greater than that enjoyed by Japan. It is larger even than that of the United States of America, yet in a great many of our economic activities we persist in behaving as if the Community consisted of 12 related but separate markets. As I have said before, the result of this is that the industry and commerce of western Europe cannot achieve the economies of scale that a large home market can offer and so have to sell overseas and at home against American and Japanese competitors whose own home markets confer upon them precisely that advantage. The United States and Japan exploit to the full their smaller home markets. If it wants to, Europe could do the same, but we are still fragmented and until we put this great disadvantage behind us we will never achieve anything like our potential.
My right hon. and learned Friend the Member for Hexham (Mr. Rippon) spoke about high technology industry in Europe. Surely that industry offers the most classic case of that which I am describing. Each Government lean over backwards to place orders in a way that will boost or protect their own national, favourite industries. That applies especially to telephone and telecommunications equipment. Every Government in Europe do that and it has been estimated that the total cost to our European Governments is £24 million or more each year. When we do that, we deny our high technology industries the opportunities that would be offered in much greater cross-frontier co-operation, and as we shrink from that we lose the battle in competition abroad. It is noteworthy that in information technology the European industries supply only 10 per cent. of the world market and only 40 per cent. of our own home market. What an example of lost opportunity.
It has also become commonplace for us to argue in favour of the full internal market to create the opportunities which our insurance and other commercial institutions seek in Europe, and which I am sure they could exploit to our advantage. They cannot do so until a full and effective internal market has been developed. We have heard about the exasperation caused by frontier delays, that personal form of non-tariff barrier that operates every

day of every week of every month of the year. It has been calculated that the delays in crossing frontiers cost trade and industry in Europe about £7 billion each year.
I should like to cite a rather human example, which moved me, of the experience of a British engineer who was bound for his company's annual conference. The company had sales representatives throughout Europe, and the conference had been booked at Vittel in France—which is, I am told, a rather sleepy spa town. About 90 engineers were due to converge on Vittel from all over western Europe. As is usual at such conferences, there was a theme which was repeated on folders, pens, stationery generally and on tee-shirts. I shall call our friend Henry; he certainly exists, but not under that name. He loaded his car with a selection of all those goods and boarded the hovercraft for Calais.
Once in Calais, Henry joined the queue of cars at the customs barrier. He was waved down and asked a few questions. All was going quite swimmingly until the customs officer spotted the box of tee-shirts in the rear of his car. Then the problems started.

Mr. George Foulkes: A box of what?

Mr. Gardiner: Tee-shirts. I thought that I was speaking clearly. The hon. Gentleman either was not listening or needs some attention to his hearing.
All was going well for our friend Henry until the customs officer in Calais spotted that box. Then the trouble started. Henry was told that it was quite illegal for him to import those tee-shirts into France without some documentation. He was told that he would have to return to England to get the proper papers. Henry expostulated: could he not dump the tee-shirts there, as the conference could get on without them? He was told that he was not allowed to do that either, and that he must go back to get the proper documentation.
So Henry boarded the hovercraft again for Dover leaving his car in Calais. On the hovercraft he was informed that he needed T2 forms to validate that importation. Of course, as soon as he arrived at Dover a customs officer said, "Excuse me, Sir, but you realise that you must pay if you want to import those goods into Britain." However, our Henry took that as a joke, and he was told how to obtain his T2 forms.
Henry then had to appoint a shipping agent. Ten minutes later an agent was produced who did the necessary paperwork for the quite modest fee of £18. Henry then proceeded again to customs. But he was stopped and told, "Sorry mate. You're freight. You must join the queue over there." The queue over there was a queue of juggernauts. So Henry lifted up his box of tee-shirts and went to join the queue of juggernauts. There another customs officer looked at him and shook his head again; "I am afraid your papers are not in order. You're freight but you're travelling on a passenger ticket. Your ticket does not declare you on the ship's manifest." The ship's manifest is the list of all the freight on the ship or hovercraft. Henry was told that he would have to go back and change his ticket.
So Henry went back and coughed up another £26 to get the necessary ticket. He then cleared customs, but while he had been waiting in the juggernaut queue it had been announced that his hovercraft was leaving early, so he had missed it. Being rather philosophical by this time, he said, "All right, I'll have to catch the next one." But someone


else said, "Sorry sir. All your papers are for the last crossing. They're all wrong for the next one." As one might expect, Henry exploded and a good British compromise was reached. He was allowed to board the hovercraft again for Calais even though he was apparently travelling with his goods illegally.
Henry arrived there brandishing all his forms in triplicate or quadruplicate, but found that there was no customs officer to present them to. However, having gone through all that, he was going to make sure that his papers were duly stamped. So someone was woken up and his papers were stamped. He was told that he would have to pay duty the following Monday at Epinal, which was the nearest tax point to Vittel, where the conference was being held. Henry then handed the whole exercise over to a secretary engaged in organising the conference. Come Monday, she contacted the tax point at Epinal to be told that she could not undertake the transaction herself but would have to appoint a French shipping agent. A French shipping agent was duly found who did the necessary work. It cost £180 including tax and the fee.
That is the situation that one admittedly ignorant citizen encountered after we have been in the Common Market for 10 years, just because he tried to perform the quite innocent task of taking 100 tee-shirts to a conference held in a French spa town. The tee-shirts, which were worth £300, ended up costing £526 and involving an unbelievable hassle. That is a microcosm of what traders and exporters experience every day at frontiers. It may be objected that the regulars know the ropes. Of course they do, but hon. Members should contemplate the cost in time and money to them of meeting the required rules.
Thus, most of us agree about the end, but the question is how do we achieve it. The barrier is the ease with which an agreement to scrap internal barriers can be blocked, usually in response to some entrenched and often fairly narrow national interest. I differ from the hon. Member for Cynon Valley because I believe that, if the situation is to be rectified, the driving force for reform must come from within the Council of Ministers. It cannot come from the European Parliament. We need a qualified majority voting system to get round that blockage.
If we want a genuine common market and a full internal market, we must will the means to that end. If we deny the means by denying the mechanism for achieving that end, we have no moral or political right to castigate the Community for its preoccupation with agriculture or for failing its citizens in those areas in which it could achieve so much for us. We know what we want; let us give ourselves the tools to get it.

Mr. Tam Dalyell: I welcome a small announcement that seemed to be spatchcocked into the Foreign Secretary's speech. It concerned the secretariat that is to be set up to promote continuity between Community presidencies. Those of us who have had the good fortune to have been members of the indirectly elected European Parliament must be worried about the peripatetic nature of European institutions. Consequently, anything that operates to ease the transition between one presidency and another is to be welcomed.
The announcement may have been small but it was significant. By its very nature, this group of people will be extremely powerful. Of course, incoming Ministers and their officials will be dependent on those who have the

power that is derived from continuity. The permanent people in the permanent secretariat will be at a great advantage compared with those who come for six months in the expectation of leaving. But how will the secretariat be accountable? I should welcome an answer to that point at the end of the debate.
Secondly, I interrupted the Foreign Secretary earlier on the question of research, and European cancer research. On 18 December 1985, the Foreign Secretary said:
Following discussion at the European Council it was agreed to set up a committee of scientific experts to recommend co-ordinated action to combat cancer."—[Official Report, 18 December 1985; Vol. 89, c. 299.]
I asked him on that occasion whether he would reflect on the concentration of work in centres of excellence, not only in Britain, but the universities of Edinburgh and Cambridge, in the Max Planck institute, the university of Leyden and elsewhere. I refer specifically to the Minister of State, Foreign and Commonwealth Office, since she gave me an answer on 15 January 1986 on the question of progress of cancer research that said:
Yes. The Committee of EC cancer experts set up following the December Foreign Affairs Council will meet for the first time on 24 January in Brussels. Its task is to make recommendations for a co-ordinated plan of action to combat cancer in EC member states. The United Kingdom's representative will be Professor Norman Bleehen, honorary director, Medical Research Council unit of clinical oncology and radiotherapeutics.
I see that we have the Minister for Health answering this debate. It is particularly apt that I should then quote that reputable correspondent, Thomson Prentice, the science correspondent for The Times, who wrote in his paper of 18 February:
Professor Derek Crowther, the cancer research campaign's professor of medical oncology at the Christie Hospital, Manchester University, and a member of the organisation's board, said yesterday 'I am concerned that the funding that we need will not be forthcoming from the EEC."'
So, hopes having been raised of meaningful inter-European research on cancer, what is now happening? Or is this just one of those good ideas that gathers dust in the pigeonholes?
Few research projects could be of more concern to Europe than the proposals on the strategic defence initiative. This is neither the time nor the occasion to go into the case of Mr. Clarence Robinson, of which more anon, but today I asked the Secretary of State for Defence what discussions his Department has had with the authorities of the Federal Republic of Germany about the terms of the agreement entered into by both countries with the United States of America for strategic defence initiative work. The reply was:
There have been some exchanges but none of detail with officials of the FRG about the respective agreements between the Government of that country and HMG with the United States Government for SDI research.
This is deeply unsatisfactory. In this of all projects there really should be some kind of co-ordinated European reaction. In the light of the leaked memorandum of understanding from Bonn, would it not have been sensible that we should have had an understanding in this country with our European partners on some kind of coherent reaction to the American SDI proposition?
I would have thought that there were more Foreign Office Ministers. Why the Minister for Health has to be dragged in to answer a foreign affairs debate I do not know, but I do not complain about these things as he is a senior Minister. I refer to the Foreign Secretary's speech. He talked in terms of treaty provisions relating to foreign


policy, how the agreements and practices of 15 years had worked well, of severe practical tests and the need for Europe to speak with one voice. The House, he said, should not be dismissive of such things.
If ever there was an occasion when Europe should have been speaking with one voice it was surely in the present Libyan crisis. The Foreign Secretary said that it was not possible to mobilise opinion on Libya unless we were in the habit of working together. They do not seem to work very well together, and I ask specifically did we, or our European partners, do anything to discourage the United States from taking the action against Libya? If not, why not? Surely it was the duty of the Europeans at least to warn the United States if they felt like this. Did they do so?
Earlier this afternoon the Foreign Secretary, when replying to my right hon. Friend the Member for Leeds, East (Mr. Healey), talked about separate considerations and separate circumstances which had made it difficult on 14 April to discuss the possible American attack on Libya. If these people were in the habit of working together, as he claims, why did they not discuss it? After all, it is not as if the French and others were ignorant of the problem, because their Governments had had requests for the use of airspace. Surely the very fact that they were asked about the use of airspace reveals that they were in the know about the intentions.
Why was it not discussed? Was any inkling given of the British state of knowledge to our European partners? I ask this because, as my hon. Friend from Carrick, Cumnock and Doon Valley (Mr. Foulkes) will know, his constituency neighbour, the right hon. Member for Ayr (Mr. Younger), the Secretary of State for Defence, made a speech on Scottish radio giving all the reasons why we should not launch an attack on Libya. Was there a difference in the state of knowledge between the Foreign Secretary and the Defence Secretary? How could the Defence Secretary make that kind of speech if in the previous week he had been brought into the know about, at any rate the possibility, more likely, probability, or certainty, of an American attack?
There is something to be settled here between the Defence Secretary and the Foreign Secretary. The act of refusal of the airspace reveals that the Foreign Secretary—

Mr. Deputy Speaker: Order. The hon. Gentleman can discuss the principle of working together, but he knows he is straying from the Second Reading.

Mr. Foulkes: On a point of order, Mr. Deputy Speaker. As well as discussing the Second Reading, we are also discussing developments in the European Community, July to December, 1985, and I would submit that my hon. Friend's remarks are within the context of that.

Mr. Deputy Speaker: I am listening very carefully. We are discussing the principle of working together and developments within the Community. Fair enough. But we must not go over again some of the incidents that the hon. Gentleman is referring to.

Mr. Dalyell: I ask how it is that Italian sources have now made it clear that the F111s which rendezvoused over

the sixth fleet peeled off not only to Tripoli but to Benghazi. One source of information is the chief defence correspondent of the Corriere Della Sera. If European co-operation at Foreign Secretary level says that this is wrong, I would like an outright denial tonight in the wind-up. Last night, hurriedly, 10 Downing street issued a denial that there were F111s over Benghazi. The truth is that from their transponders the Italians did track—

Mr. Cash: rose—

Mr. Dalyell: It is always said that it is disgraceful when Downing street is caught again concealing the truth or misleading the House.

Mr. Cash: Will the hon. Gentleman accept that there are those engaged in this debate who would like to talk about the Bill before the House, and would he accept that this is nothing more or less than a publicity exercise, a "super-Belgrano", on his part?

Mr. Dalyell: I will not be too long.
I admit that cluster bombs found in Benghazi had navy markings, but I ask the very direct question of the Minister who is to reply: were there F111s over Benghazi? Are the Italian sources wrong? I do not think they are, and if they are not wrong, why was Downing street going to such pains to issue that statement last night? Is it that they simply do not know what is happening?
I ask for clarification of the Official Report of 16 April, column 950. The Foreign Secretary said to my right hon. Friend the Member for Leeds, East:
There was scarcely any mention of the United States intention.

Mr. Cash: On a point of order, Mr. Deputy Speaker. May I draw your attention to the fact that you have just ruled on the hon. Gentleman's speech? It is getting very tedious for those of us who have to listen to it to hear these revelations about something that has nothing to do with the Bill.

Mr. Deputy Speaker: Order. Whether hon. Members are in order is a matter for the Chair. I am listening carefully. The hon. Member for Linlithgow (Mr. Dalyell) must relate his remarks to the Second Reading of the Bill.

Mr. Dalyell: As my hon. Friend the Member for Carrick, Cumnock and Doon Valley pointed out, we are discussing also page 29 of the White Paper on Developments in the European Community where there is a heading, "EC/United States". I think I am in order.

Mr. Deputy Speaker: I have been listening carefully and the hon. Gentleman's last remark did not seem to relate even to that.

Mr. Dalyell: The Foreign Secretary continued:
No evidence emerged during the discussion that any Foreign Minister was aware during the meeting of a final American decision to attack. For my part, I had no confirmation of any decision by the President, still less of any decision to authorise raids that night, until I came back to London and met the Prime Minister."—[Official Report, 16 April 1986; Vol. 95, c. 950.]
What exactly is meant by confirmation? Does that mean that the Foreign Secretary had no inkling?
If we are to have the European co-operation which the Foreign Secretary thinks is so important, there must be at least some candour between partners. I believe it to be both hypocritical and unwise to try to justify the action on the ground of article 51 of the United Nations charter; it is hypocritical because the article was never intended to


cover anything like that, and it was unwise because it opens the door to its abuse. To extend it to justify armed action—

Mr. Deputy Speaker: Order. The hon. Gentleman has quoted page 29 of the White Paper. There is nothing there about armed action. He must relate what he is saying to the Bill.

Mr. Dalyell: We are discussing also the relations between the EC and the United States, but I shall be brief. Beyond one's own frontiers it could have very undesirable repercussions. For example, it could be used by Libya to justify a reprisal—

Mr. Cash: Boring old twat.

Mr. Dalyell: —for something that happened to a Libyan in this country.
Did I hear the hon. Gentleman aright, saying that that was rubbish?

Mr. Cash: I was saying that it was extremely boring.

Mr. Deputy Speaker: Order.

An hon. Member: He said "Twat."

Mr. Dalyell: The twat in this case is the Field Marshal Lord Carver. I was quoting exactly—

Mr. Deputy Speaker: Order. The hon. Member for Stafford (Mr. Cash) must withdraw those remarks. They are unparliamentary.

Mr. Cash: I withdraw the remark, but it was said under provocation of an extreme kind.

Mr. Dalyell: We want to know who was consulted and at what stage—

Mr. Deputy Speaker: Order. The hon. Member is talking about particular actions and who was consulted. That is not related to the debate. He must come to the subject of the debate or I shall have to ask him to resume his seat.

Mr. Dalyell: One of the troubles about the House of Commons is that generalities are all right, even if they are waffle, but when one asks specific questions of fact, things are more difficult. I am interested in fact because it is fact that illuminates the dreadful things that have happened.
There is one other matter that the Community should consider—an agreement on the vexed question of end user certificates. To have the countries of Europe competing in exporting sophisticated armaments without asking questions about where those armaments end up is highly dangerous. More and more of us are concerned about terrorism. We know that arms are exported from the countries of the Community to other countries and that a blind eye is turned to those arms finding their way into terrorists' hands. Is there not something to be said for countries getting together to consider the whole question of how sophisticated armaments can easily end up in terrorists' hands? Could not the European countries get together to produce meaningful legislation about end user certificates? It is such European co-operation that some of us believe in.

Mr. Teddy Taylor: I think that most of us agree that in many respects this is an unsatisfactory

debate. The Government are gaining a day by taking the six-monthly Community report with the Bill, although the six-monthly report makes only a tiny reference to the Bill.
We have heard again a pile of generalisations that if only we pass the Bill things will be better, although there is no indication of why or how. Rather than having the Bill and the treaty, how much better it would be for all of us and the country if we were simply to concentrate on trying to persuade the Common Market to solve, with the powers that it already has, some of the problems which have existed for years and years and which have been getting worse.
Hon. Members will know that when we joined the EEC we were advised that it would bring us more jobs, more prosperity and better trade. I am not saying that it is necessarily cause and effect, but since we joined trade has been disastrous, so that instead of the constant surplus which we always had previously we now have a deficit of £9 billion in manufactures. With regard to employment, there is hardly an area of the world, apart from the Common Market, and possibly Tibet and El Salvador, which do not publish figures, with a worse record in job creation.
Apart from that, Common Market spending has got out of control. Of every penny that it spends, 54 per cent. goes not on agriculture but on the dumping of food in outside countries, mainly Russia, east Europe and Libya. Plenty of things are wrong. They need to be solved, and they could be solved with existing powers. That is the view, not just of a Back-Bench militant, but of the Prime Minister, the Foreign Secretary and the whole Government until a few months ago.
That view was repeated time after time by the Prime Minister and the Foreign Secretary when we asked them about it. We had the Milan summit. Immediately after it the Prime Minister said:
I saw nothing before us which would require an amendment to the treaty."—[Official Report, 2 July 1985; Vol. 82, c. 189.]
Later my right hon. Friend made it abundantly clear, as did the Minister of State, Foreign and Commonwealth Office, that far from being necessary a new treaty would hold Europe back from solving its problems, would divert it, would take up its time and would not solve anything at all. Therefore, the Bill is unnecessary and irrelevant, and will simply divert Europe from tackling its problems. That is not the only point. We should be trying to persuade Europe to apply properly the powers that it has.
The Foreign Secretary made a rather ungracious speech. I think that that was because his heart was not in it. He is such a nice person that we can usually tell when his heart is not in a subject. He was giving us assurances. On a previous occasion when he wanted us to pass something else which he did not like, namely, the agreement of 4 December 1984 which led to increased contributions to the Community and all the rest of it, we were given specific assurances. We were told, "You need not worry. We will have regular reports month by month to make sure that there is not any spending."
That was not just a decision of the Government, but a provision in the agreement. Under paragraph 6(b) the Commission had to submit a monthly report to the Council of Ministers about trends in agricultural spending. On 11 March I asked the Minister of Agriculture, Fisheries and Food how many such reports had been made. The answer


sadly was, none. Yet it was a provision of the agreement that a monthly report be made. The answer to my question was:
The Commission has not recently produced a formal monthly report to the Council".
The EC Commission was also obliged, under paragraph 6(b), to give a report on early warning procedures of possible budget overruns. I asked the Minister whether the Commission had done so. The answer was:
The Commission has not specifically reported under this procedure".—[Official Report, 11 March 1986; Vol. 93, c. 436.]
If the Government are saying that we must pass the Bill because assurances have been given, I ask them to start trying to ensure that the Common Market actually applies some of the legislative provisions that exist now.
There is also the rather astonishing decision of the Commission—this makes me think that the Government should be chasing the existing powers—to take power unto itself to sell dairy products to anyone at any price and not to publish the figures. Despite our disagreements with them from time to time, Agriculture Ministers are very good in telling us the whole truth. When I asked whether the Commission had the power to which I have referred, the answer was:
The Commission considers that it already has the authority to act in this way, so no proposal was put to the Council."—[Official Report, 8 April 1986; Vol. 95, c. 37.]
Many things need to be done, and the Bill will not do any of them, but will simply be a diversion. My hon. Friend the Member for Reigate (Mr. Gardner), in his fascinating speech, talked about the problem of people taking tee-shirts to Paris. He did not say that every problem could be solved within the existing rules if there was the will or if the European Court worked. The only problem that could not be solved was the difference in VAT, which led to the tax liability.
We also have the problem, which we constantly put to the Government, of the abuse of some of the trade laws, a good example of which is the abuse of the inner German trade agreement. Hon. Members on both sides have been pestering the Government with complaints about the abuse of the inner German trade agreement. There is the strange situation that 40 per cent. of all Britain's imports of powdered eggs come from Germany, although Germany is not self-sufficient in the manufacture of eggs. This is simply because piles of materials come from eastern Europe and get into the Common Market through the abuse of the inner German trade agreement. This problem must be solved, but nothing is being done about it; no one is taking any action. Yet what the Government want are more legislative provisions.
There is a decided lack of will by any Government to do anything about the absurd problem of the CAP. They all say that something should be done, but no meaningful or sensible policy is put forward by anyone. This problem could be solved, yet in this case the Bill makes not the slightest difference. What we need, instead of more power for the Common Market, the European Assembly and the Commission, is to get them to try to solve some of the problems which exist now and which are certainly not being solved.
My hon. Friend the Member for Reigate also referred to the problem of telecommunications. He said how much better it would be if we in Europe could stop

discriminating on a national basis and buy home goods to establish the basic market that we need to export abroad. He knows that it is unlawful to discriminate in public purchasing against the products of Germany, France, Italy, Luxembourg or any part of the Community. That is the law now; we do not need new provisions. The law that exists needs to be implemented if we think it is sensible.
We can look back to when we were told that if only we joined the EEC lots of good things would happen. It is rather like a doctor giving one pills to make one's tummy better. If one's tummy gets worse, the answer is not to take more pills. However, in this case we are being asked to give more powers to the European Assembly—which is now to called the Parliament—and to the Common Market to do things. As well as the disappearance from some areas of the unanimity rule, the Common Market is taking on new activities, ideas, spending and bureaucracy. How will it help this nation, or help the Common Market to solve its problems, if we simply give more power and responsibility and, I believe, create more complexity in the way that it operates?
The Bill gives more confidence to the Common Market to take action and to spend money. Do we really think that by putting more public funds into the activity of the Common Market it will solve the problems? The Bill will give a new name to the European Assembly—a marginal provision. Some people would regard that as a point of principle, but I think that it is rather silly. The Bill provides for a new European Court because the existing court has become overloaded. I understand that the number of cases considered by the court has tripled over the past few years.
The Bill provides for a new commitment to European union. As I have said, the Foreign Secretary was a little nasty in his speech today because, I believe, his heart was not in the task, so perhaps it would not be unkind to remind him that when he was asked, at the time of the announcement of this treaty, whether it referred to a commitment to European union he said that I was misleading the House as there was no question of European union being mentioned. However, in the Bill there is a clear commitment to European union and, most important, a commitment for the first time to provide the means to achieve the union.
In addition, the European Assembly is being given the power to stop certain action. The powers are complicated, but the provisions simply mean that, if the European Assembly, by a clear majority, does not like what the Council is doing, the Council can overturn the rejection only by a unanimous vote. In those circumstances, obtaining a unanimous vote will be difficult, particularly in view of the attitude that Italy has to the views of the European Parliament. So in this case a major new blocking power is provided.
Then there is the removal of the provision for unanimity or veto on a number of issues. This is not a new principle, because of the provision in several areas already for majority voting. The Bill extends this provision into other areas, particularly harmonisation measures. It has been suggested that this will make completion of the market easier, but I doubt whether it will do anything in that direction.
The Minister should give an assurance to those who are worried about this extension. For example, will the new television directive limit on the number of non-EEC programmes shown in this country and in others fall under


the majority voting procedure? My understanding from those who know about it is that it will do so, but it would help to know for certain whether that is the case. Will the provision mean that the Government will be committed to support the harmonisation of taxes? We know that such a provision will need unanimity, but if this is what is intended, are we willing politically to face the desirability of introducing VAT on gas, electricity and so on?
I suggest that the Bill will not improve the working of the Common Market. It will add a little more confusion by giving more power to the European Assembly, and we do not need that. What we need to do is to persuade the Government to use all their resources to try to persuade the Common Market to solve the problems that it has, without giving it new responsibilities.
I hope that hon. Members considering the Bill will bear in mind that £75 million is a lot of money. With that sum we could build many schools, hospitals and roads. Yet £75 million is what the Common Market spends every week simply on export rebates for dumping food. It is an outrage that we are spending so much on dumping cheap food in the Soviet Union and Libya. Those who care about the Third world should think about what this dumping is doing to the poorest countries in the world. It is depriving them of a decent price for their produce and spreading devastation, destruction, distress and debt.
I hope the House will reject all the silly nonsense in the Bill. I hope that it will get rid of it, as the Government wanted to do before they were persuaded by the views of the other partners to adopt it. We know that the Government think that this is a wretched piece of legislation and that they never wanted it. The Government should stand by that position, throw out this silly Bill, and make it abundantly clear that as from now we expect the Common Market to try to solve some of the many problems which remain unsolved and which in some cases are getting worse.

Mr. Tom Clarke: I will for the most part direct my remarks to the document,"Developments in the European Community". If there is time, on international matters, I would like to refer specifically to pages 32, 29 and 9. I am encouraged to do so by paragraph 2.11 on page 9 which states:
The new treaty on European Co-operation in the sphere of Foreign Policy, based on the British text tabled earlier in 1985, formalises and strengthens the commitment to consult and concert. It applies to the existing pattern of consultation on the economical and political—but not the defence—aspects of security".
I hope that what I have to say will be considered relevant to the debate.
I welcome the presence of the Minister on the Front Bench. However, I would not have complained if the Minister for Health were still present, because I had intended to refer to the section of the document which refers to the anti-poverty programme. I had hoped that the Department of Health and Social Security would pay due regard not just to the views of many people on the document—important though it is—but to the response to some of the remarks of the right hon. Member for Taunton (Sir E. du Cann) who seemed to pour cold water on the influence of the European courts and the role that they play.
I could not disagree more strongly with the right hon. Gentleman. The European courts offer, if perhaps not

more experience, certainly fresh attitudes to many matters. They are not bogged down by commitments to the establishment, and they can bear in mind the demands of the modern world. It is perhaps unfortunate that the right hon. Gentleman said what he did after the expression of opinion by the Lord Advocate to the European Court of Justice in the case of Mrs. Drake. I wish that the Minister for Health had been here at that point in the right hon. Gentleman's speech. I believe not only that the views expressed in that case on the invalidity care allowance are profoundly progressive and humane, but that it would be outrageous if the Government did not accept those findings. I am sure that many hon. Members will join me in deploring the rumours circulating today not only that the Government will set the opinion aside but that they might discontinue the allowance in all its aspects. I do not believe that the House would be prepared to accept that.
The document made at least three references to the steel industry. If I understood the hon. Member for Nottingham, East (Mr. Knowles) correctly, he described the EEC as an economic giant. His speech was in many ways a courageous one and I hope that I am not taking that remark out of context. However, it would be difficult to persuade those in the west central belt of Scotland that the Community represented an economic giant in terms of the real world, especially in view of the heavy and growing burden of unemployment—especially long-term unemployment—that we bear in that part of the United Kingdom.
The report refers to the problems of protectionism. I shall not want to sound anti-American, especially when I discuss international matters, but the report shows that in 33 categories the Americans are applying protectionism. I am not sure that that is consistent with the policies that the Community, in co-operation with the United States, would wish to see pursued.
There are practical effects for my own constituents in the steel industry. We have had more than our fair share of job reductions in that industry. For every three Jobs in the United Kingdom in 1979, there is only one today. I am sure that the same applies to many other industries—for instance, shipbuilding. Last week I was in the constituency of my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman). I was reminded that my hon. Friend's constituency has lost 4,000 jobs in shipbuilding alone since 1982. Such a situation does not seem to show the influence of the policies of an economic giant.

Dr. Godman: My hon. Friend's natural courtesy ensured that I knew of his proposed visit to my constituency far in advance.
The decline continues. My hon. Friend may be interested to know that I was unable to be in the Chamber to hear the opening speeches in this debate because I was seeking meetings with Ministers in both the Scottish Office and the Ministry of Defence for the trade union representatives of another shipyard in my constituency which has no orders whatsoever and faces closure.

Mr. Clarke: I know that my hon. Friend's constituents are fully aware of the excellent job that he does in stating their case and are very appreciative of his work.
I deplore the decline in our manufacturing base and the de-industrialisation which, alas, is taking place throughout the Community and especially in my part of the world. I am also concerned about the environmental issues raised


by the right hon. and learned Member for Hexham (Mr. Rippon). On Monday, I drew to the attention of the Minister for Overseas Development the document "Mandate for Change" published by the World Commission on Environment and Development. The Minister said that he regarded the document as an interim one. He gave the impression that he was not responding wholeheartedly to the concern expressed in that document for the environment not only in the United Kingdom and the developed countries but also in the Third world, where the environment is just as important to those who live there as our environment is to us.
The document "Mandate for Change" made it clear that there is evidence that has led 20 other countries to act in the interests of the environment. We should bear that in mind when we are dealing with funding for overseas aid and overseas investment and development. I have no wish at all to encourage a reduction in our contribution, but I believe we should try to improve the quality of that contribution, and I believe that bearing the environment in mind will help us to achieve that objective.
I wish briefly to mention the international aspect. The document suggests that the Community is now more concerned with the problems of the developing world than was the case until perhaps a year or two ago. That is very laudable. I believe that the Lomé convention meeting held in Inverness not long ago made an important contribution to the consideration of such matters and also to the acceptance of the role of women in the underdeveloped world. In passing, I believe that the House was delighted with the speech by my hon. Friend the Member for Cynon Valley (Mrs. Clwyd). Her experience in those matters was self-evident, and helpful to both the House and the Community.
We must be concerned about the future of our planet, the future of the Third world and the growing problems of armaments at a time of great international poverty and friction. We should therefore give some thought to the paragraph in the document that deals with our relationship with the United States and with East-West relations.
I think that it is fair to say that the Community, on the evidence of this document and on many other actions in which it has been involved, now has a more progressive view on such matters as the Iran-Iraq war, South Africa and East-West relations in addition to the growing problem of central America.
Some hon. Members suggested earlier that anti-Americanism is evident on the Opposition Benches. That represents a considerable misunderstanding of the genuine problems which we feel are being faced in terms of our relationship with the United States. It is not anti-American to take the view that I take. It certainly is not true today that America has the leadership it deserves. That is not always the case, despite the fact that it might be stated often.
I do not think that America deserves its present leadership. I believe that circumstances have changed very dramatically since President Reagan took office, not just for the standing of the American presidency but for the American role in the world. I do not think that any of us should assume for one second that the kind of policies and philosophy that he endorses represent anything more than

a temporary aberration from which I am sure both the United States and our relationship with it will in time recover.
Perhaps the saddest aspect of the present American President's attitude is that, because of the philosophy he pursues and because of his carefully considered and carefully projected rhetoric, he has no solutions to the present problems. The President last night addressed the Heritage Foundation. He presented serious problems, not only in simplistic but in unhelpful terms when trying to find a solution to the problems. Did he think when he talked about the relationship between Daniel Ortega and Colonel Gaddafi that his policies in recent years—

Mr. Deputy Speaker: Order. I have listened carefully to what the hon. Gentleman has said. These are important matters, but the hon. Gentleman must relate his comments to the Bill before the House.

Mr. Clarke: I was attempting to do that, and also to bear in mind the Order Paper, which refers to the document I have been discussing. You will be happy to know, Mr. Deputy Speaker, that I am about to conclude.
The document refers to the problems of relationships between ourselves and other countries, including the United States. The time which was given to this debate, important though it is, was limited in scope and was bound to limit hon. Members on the amount that we feel it is appropriate to contribute. That said, I think that it has been a welcome debate. If it means that the House can address itself to the problems of Europe—Europe itself and Europe in a changing world—in the knowledge, which seems to be universally accepted, that we have a great deal more progress to make in the House and in Europe, I believe that that will be in the interests of our people and very much in the interests of a wider world.

Mr. John Butterfill: When my right hon. Friend the Member for Taunton (Sir E. du Cann) addressed the House, he stressed the importance that we attach to having an unwritten constitution and the great contribution that that has made to the development of this country. It has enabled us to adapt over the years to changing circumstances. The degree to which the European Community has been able to adapt over the past few years to changing circumstances without needing to change the treaties is remarkable. The original treaties have been stretched in all sorts of directions. Many things have been done that were not originally envisaged. Indeed, the Parliament has been exercising more powers, in many ways, than it was originally granted.
When it is said that the Bill and the Single European Act are not necessary for Britain, we can probably agree with that. We are used to living with an unwritten constitution which is continually evolving out of custom and precedent, but we have to remember that the vast majority of states in the world, certainly the majority in the European Community, are not used to living with an unwritten constitution. They are used to having written constitutions which, if they wish to change, they have to change in writing. I hope that we will agree to pass this legislation and adopt the Single European Act, because of the need to conform to the practices of our partners. That is an entirely honourable thing to do.
In view of the changes that have taken place, the subtle changes that are envisaged in the Single European Act and


the proposal to change the name of the Assembly to Parliament are right. When the treaties were established the Assembly was an appointed body. It is now an elected Assembly and it does a good deal more than it originally did. It certainly scrutinises legislation and, although strictly speaking it is not entitled to do so, it has, of late, subtly been proposing legislation.
It is extraordinary that those who hold democracy dear should consider that it is reasonable that under the treaties as they stand only the Commission can propose legislation. It seems to be far more reasonable that an elected European Parliament should be able to propose legislation. The modest change envisaged suggests that the European Parliament will be able to propose amendments to legislation. I cannot see how anybody who holds democracy dear to his heart can object to a proposal of this nature.
I can find only one thing objectionable in the entire Single European Act. This is contained in the preamble to the Act, where it refers to something that is not part of the treaty setting up the European Community. It refers to the
Convention for the Protection of Human Rights and Fundamental Freedoms".
This convention has caused us much trouble. It is the convention which the European Court of Human Rights upholds, and it is the convention which tells us, for example, that we cannot have corporal punishment in our schools. I do not believe that a court consisting of a few judges in Europe should be able to dictate to a sovereign Parliament what it can or cannot do in its own country about social matters or sentencing policy. Therefore, I object only to that one element contained in the recital of the Act.

Mr. Foulkes: I think that the hon. Gentleman is getting mixed up. I think that he is talking about the European Court of Human Rights, which is under the jurisdiction of the Council of Europe and is not part of the European Community at all.

Mr. Butterfill: The hon. Gentleman is right. Perhaps he was not listening to what I was saying. I referred to the
Convention for the Protection of Human Rights and Fundamental Freedoms
This is contained in the fourth paragraph of the preamble to the Single European Act, if the hon. Gentleman would care to refer to it. It says:
Determined to work together to promote democracy on the basis of the fundamental rights recognised in the constitutions and laws of the Member States, in the Convention for the Protection of Human Rights and Fundamental Freedoms and the European Social Charter, notably freedom, equality and social justice.
That is the only element in the Act to which I have any objections.
With regard to the importance of the development of the internal market, I cannot improve on the demonstration of the difficulty involved which was given by my hon. Friend the Member for Reigate (Mr. Gardiner). It is important to my constituency that the changes are achieved by 1992. Bournemouth has become a major centre for insurance and financial services. The European headquarters of the Chase Manhattan bank are being constructed in my constituency. To exploit the considerable advantages and expertise that Britain has built up in insurance and in financial services, it is vital that we succeed in completing the internal market.
We must remember that, although Britain is an island and is less affected by what others around us do, our

partners in the European Community have direct and abutting land frontiers and are much more directly affected by what goes on in neighbouring states. Although we feel that environmental co-operation is important to us, it is much more important to our continental neighbours.
I support the proposals for the regional fund. The United Kingdom has benefited greatly from the operation of that fund. It is extremely important to develop other aspects such as the regional and social funds, which take away some of the enormous preponderance that has tended to attach to agricultural policy in the European Community. If the Community develops in other directions, this will greatly benefit the citizens of the Community, particularly those in the United Kingdom.
It is vital that Britain co-operates with her European partners in research and development. There is only one way in which we can meet the competition which we are now facing from Japan and the United States of America. That is by co-operating and exploiting the advantages of what is potentially the largest single domestic market in the world. We have begun to do that through the ESPRIT and BRITE programmes. It is vital that we expand those operations.
The events of the past week illustrate more clearly than anything else the need for us to co-operate on foreign policy, the need for us in Europe to be able to speak with one voice, and the enormous influence that we can have on events in other parts of the world if only we are prepared to get together and co-operate. I very much hope that we will increase co-operation. My final hope is that we can join the European monetary system and demonstrate even more clearly our commitment to membership of the Community.

Mr. Ron Leighton: The EEC spends most of its money on the common agricultural policy. The best description of the inanities of this money-eating monster is in last year's July report by the Comptroller and Auditor General. I urge all hon. Members to read it. Since then the position has deteriorated. In 1985–86, public spending in Britain on national grants and subsidies under the CAP increased by £500 million to £2·215 billion, yet, in 1985, farm incomes dropped by £879 million to £1·154 billion. The astonishing fact is that support spending on agriculture exceeds farm income. It would be cheaper to pay farmers to produce nothing.
Public spending averages more than £9,000 for each of the 240,300 farm holdings in the United Kingdom. Each holding receives an average subsidy of £9,000 per annum. Most goes on buying up and storing surplus farm produce for which there is no market. Public spending plans allow for further increases. Is not all that wicked and insane? These costs, together with a high level of guaranteed prices, represent a significant transfer of resources from the consumer and taxpayer to the producer. This has stimulated agriculture at the expense of other sectors of the economy. A uniform price for all producers means that large producers are oversupported and encouraged to maximise production, but that does not help small farmers and poorer farming communities.
Let us consider the remarkable feat that present policy has achieved. The CAP was invented in 1957. The policy has boosted public spending to massive levels. The people who are supposed to benefit from this spending have suffered a severe income drop, and their numbers continue


to fall. Huge food mountains continue to grow, and the price of food is much higher than it needs to be. By doing this, we damage the interests of our friends around the world, such as those in New Zealand. Only a madman could have achieved that.
Let the House answer the lunacy of one of the chief activities of the CAP. Expensive energy is used to dry into powder skimmed milk left over from making surplus butter. We subsidise the sale of the skimmed milk powder to other EEC farmers who feed it back to the livestock, after adding the water removed in the earlier costly process. We are financing that. Britain has been paying a disproportionate amount to finance this tomfoolery. We were told that all this would be put right by the Fontainebleau agreement. The agreement was to guarantee Britain its rebate and impose financial discipline on the CAP. Spending on agriculture was to grow more slowly than the growth of budget own resources. The Fontainebleau agreement immediately increased by 40 per cent. the VAT contribution to own resources. The Commission has pointed out that agricultural financial discipline could be breached in "exceptional circumstances" or "aberrant circumstances". We know that the whole of the EEC is an aberration and is exceptional.
This much-lauded financial discipline was breached last year. It will be breached spectacularly this year and will be breached again next year. The Fontainebleau agreement is proving worthless in practice and is breaking down.
The breach of financial discipline has been caused by the fall in prices on the world market, which makes it more expensive to subsidise the dumping of EEC surpluses, and by the change in the value of the dollar. As a result, the EEC keeps coming back for a supplementary budget—for even more money to throw down this black hole. Some of us predicted that that would happen. In previous debates, we said that the only thing to do was to turn off the tap of the money supply that finances this madness. The same is true now. As long as we keep voting to give the Common Market more money, this obscene rake's progress will continue.
In the past four years, EEC intervention stocks have increased 500 per cent. At great expense, they are being added to faster than they are being emptied. The 1·4 per cent. VAT ceiling will soon be breached. We should remember that the EEC budget mechanism is fixed only while the current 1·4 per cent. VAT ceiling is operational. It could be withdrawn as Fontainebleau collapses.
The Commission now looks upon co-responsibility levies as additional taxes to fund agricultural surpluses rather than alleviating them. They are likely to be passed on to the consumer in even higher prices. At the moment the concept of value for money is wholly alien to the Common Market.
I always thought that the Conservatives regarded the function of prices as being to bring supply and demand into balance. The common agricultural policy needs a several-year programme of reducing prices, announced in advance and consistently maintained. Hardship among farmers should be alleviated by direct income support. That would enable us to have freer trade in food and to open our ports once more to the produce of the world, providing cheaper food for our people. To achieve such a sensible policy we

shall need to repatriate agricultural policy once more to the jurisdiction of this House rather than leaving it with the EEC bureaucracy.
This dangerous Bill does the opposite. It takes further powers away from this House and gives them to Continental institutions not elected by us or anybody else, and not removable by us. That is a further unacceptable loss of democratic self-government, yet self-government is our most precious possession.
What would be the good of discussing policies with people at general elections if, when we got back to the House, the powers to implement those policies had been surrendered and given away? When voters complain to us about this we shall have to tell them that we have no powers over these matters and that it is no good coming to us but that they should go to Brussels where such issues are decided.
This wretched Bill lists a whole range of matters that are now to be dealt with by majority voting. Let me give the House a good example of what that will mean. The hon. Member for Aldridge-Brownhills (Mr. Shepherd) asked the Prime Minister about the EEC budget. In her written reply on 26 March this year she said:
The proposed increase in non-obligatory expenditure represented a threat to budget discipline".
That is a bad thing. We cannot have a threat to budget discipline. She goes on to say:
The United Kingdom accordingly opposed the revised draft Budget, which was adopted by qualified majority."—[Official Report, 26 March 1986; Vol. 94, c.493.]
So it does not matter what we say, however dangerous it is, if we have qualified majorities.
As the Scrutiny Committee has said, the Bill provides for the treaties to be amended so that a whole list of matters may be dealt with in a similar way, a whole list of matters over which this House will surrender control, not only derogating from and damaging this House, but damaging the electorate and damaging democracy. It breaks all the pledges made to the electorate at the time of the referendum. It abrogates the basis of that referendum and of our membership.
I have here the document that was issued by the Government at the time of the referendum. It was printed in red, white and blue. It says at the top of the page:
Will Parliament lose its power?
and goes on:
Fact No. 2. No important new policy can be decided in Brussels or anywhere else without the consent of a British Minister answerable to a British Government and British Parliament.
It could not be clearer or more specific, but this Bill flies in the face of that clear pledge to the people. Every issue on which this Bill specifies majority voting is an affront to that pledge and that commitment so solemnly given in the referendum. Such a proposition of majority voting has never been put to the British people, and there is absolutely no popular consent to this unprincipled Bill which double-crosses the electorate.
To pledge in the referendum that a British Minister answerable to this House will always have a veto and then to come along with this Bill to provide for majority voting is a cheat and a swindle and it deceives the voters. This continuous undermining of Parliament, of our democratic self-government and of the rights of the electorate is something to which I shall never be reconciled and will work to rectify.
Symbolic of this whole issue is the proposed change in the name of the European Assembly. "Assembly" is a good name for this unloved institution. It assembles. Apart from doing that and talking, it does little else. It is a talking shop, not a proper Parliament that legislates. However, those who want to turn the Common Market into some sort of monster unitary state want, as a symbolic gesture, to call it a Parliament and to give it extra powers. The key question is, if the EEC Assembly is to get extra powers, where will they come from? Any extra powers for the Assembly will inevitably mean fewer powers for this House and the people who elect us, and we should resist that.
My final point is on employment. When we entered the EEC simple souls suggested that the so-called bigger market would be better for our industries, exports, balance of payments and employment, what they lyrically called jobs for the boys. The harsh truth is that, from whatever angle we look at it, EEC membership has cost us over a million jobs. Two out of every three jobs lost in recent years have been in manufacturing. The figures which are given in the table on page 58 of Cmnd. 9761, the White Paper before us, tells us that in our trade in manufactures with EEC countries in 1970 the export-import ratio was 137 per cent. In other words, for every £100 they exported to us, we exported £137 to them, a very healthy state of affairs for us. What has happened since? Did we benefit from market membership, as we were told we would? The very opposite has happened. The export-import ratio has declined continuously until last year it was only 71 per cent. For every £100 that they sent us we sent them only £71. From a trade balance of about £1 billion in our favour, we now have a horrendous deficit of some £10 billion. This enormous turnaround is one of the main causes of unemployment in this country.
At the last election the CBI, which now increasingly represents importers and firms that have transferred substantial parts of their manufacturing capacity abroad, said that 2,500,000 jobs depended on our exports to the EEC—

Mr. Cash: rose—

Mr. Leighton: I will not give way.
From the same arithmetic it would follow that 3,750,000 jobs have been destroyed by the imports we take from the EEC, which are now 50 per cent. higher than our exports to it.
If we consume the products of Continental factories rather than British factories, it must mean unemployment here. Thus British jobs have been lost not because of the microchip but because other people are supplying our market. There is no solution to our unemployment without turning back the tide of imports which has closed down British factories and destroyed the jobs in them. The imports that are doing the damage are primarily from the EEC, in cars, textiles, chemicals, furniture and engineering. EEC imports have displaced British production. The treaty of Rome commits us to accepting levels of imports however high, whatever the cost and however fast they rise.
Ironically, we have handed over responsibility for our trade to the Brussels Commission, the equivalent of rewarding the burglar with the only set of keys. Any future British Government which is serious about strengthening British industry will come up against Common Market

rules. If we want an effective industrial or regional policy, if we want to plan and regulate trade, if we want to say that British firms should have national objectives, if we want to deal with multinationals, if we want selective public sector purchasing or a form of exchange control, we shall come up against the restrictions of the treaty of Rome.
So we have to make up our minds. Are we committed primarily to the treaty of Rome, whatever the cost, or shall we give priority to the conquest of unemployment and the revival of manufacturing industry in this country? In the choice between jobs and the treaty of Rome, I have no difficulty or hesitation in choosing jobs.

Mr. William Cash: I have for many years been a supporter of the European Community in the broadest possible terms, but I have some reservations about how we might move to majority voting.
We have to live in the real world and to be practical about the Bill. I am a member of the Select Committee on European Legislation and endorse everything that its report says. It says that British industrial and commercial interests must get in on the act early.
I listened with interest to the hon. Member for Newham, North-East (Mr. Leighton). He voices the anxieties of many people, but many of those anxieties need not arise if we can be brought into the process earlier. There should be a change in our standing orders and our terms of reference so that the Select Committee can evaluate what is going on early enough. Community jargon has the phrase "avant projet".
Having practised as a lawyer in commercial law concerning the Community, I am aware that many directives reach maturity and get through the Select Committee without sufficient consideration en route. European agricultural organisations tend to get in on the act early, but the same is not true for many others.
My right hon. and learned Friend the Foreign Secretary emphasised the wider implications for Britain, which I endorse, and said that the Confederation of British Industry, the Institute of Directors, the British Institute of Management and the Association of British Chambers of Commerce all want completion of the internal market. I envisage many advantages in that, but it would help the Select Committee if organisations made their representations to us earlier when they found matters of concern to them.
Many members of the Committee have examined the European Parliament's powers and we made it clear in our report that we consider the Luxembourg compromise still to be valid. We tend to exaggerate the dangers of majority voting. We live in a global economy but have to keep our interests ahead of other people's. We must have regard to our own interests while working in the EC. I was interested to read what my hon. Friend the Minister for Trade said on 13 February in regard to the multi-fibre arrangement. He said:
I suggest that the House approaches the matter from this angle: first—I mention it first and rate it first—are the interests of the people of the United Kingdom".—[Official Report, 13 February 1986; Vol. 91 c. 1109.]
That is an extremely fair way in which to approach such matters. We must respond to a range of issues such as the big bang, which is coming in October.
I have recently served on the Financial Services Bill Standing Committee and have learnt the extent to which


we shall be exposed to international pressures in investments, capital movements, competition, biotechnology, intellectual property—in respect of which we have a new White Paper—banking, financial services and telecommunications. In such matters, our commercial and industrial prosperity for the next 20 years is intimately bound up with the EC and I have no intention of turning the clock back. It is essential, however, to keep an eye on what that clock is doing and what its mechanism is achieving to ensure that scrutiny in Parliament is retrieved.
I listened with interest to my colleague on the Select Committee, the hon. Member for Cynon Valley (Mrs. Clwyd), and had much sympathy for what she said. I have received an interesting letter from my hon. Friend the Minister of State, Foreign and Commonwealth Office in which she was good enough to reply to my letter concerning scrutiny. She said that the Government were looking into the Scrutiny Committee's proposals. I hope that she will have some interesting things to say later. I do not think that she will mind my quoting that part of her letter in which she said:
I accept that this"—
majority voting—
will not be risk-free for us.
It is by no means risk-free, but if we get into the negotiations seriously enough and early enough we shall be able to retrieve a great deal of the initiative which has been allowed to go through apathy and inertia.
We must learn to live in the modern world of Japan, of the United States, of protectionist pressures and of the need to maintain market share, to compete effectively and to maintain a high profile of high quality goods which win markets against international competition. If we do not remain alert to the dangers inherent in the Community's mechanisms, we shall reap the whirlwind. If, however, we use the mechanisms effectively, we shall be able to use the opportunities that the EC offers.
It is over to us. We must bear in mind the consequences of giving legal effect to the proposals in the Single Act. The European Court of Justice will be involved. We must be sure that we know what we are doing. Who will control it all? The Government? Parliament? The Commission? Will we have sufficient input from our trading companies and the professions? Will we ensure that we maintain our people's livelihoods? That is what the Community is ultimately about, but we will not achieve that end unless we monitor closely the legislation that could have the most far-reaching effect on our economy during the next 20 years.

Dr. Norman A. Godman: I wish to raise two issues with the Minister of State, the hon. Member for Wallasey (Mrs. Chalker). They arise from the White Paper and the legislation. First, paragraph 7.7 of the White Paper says that the Transport Council was
unable to reach any agreement on the package of draft shipping legislation put forward in the Commission's memorandum on sea transport.
I believe I am right in saying that cabotage is to be discussed next month at a meeting of the Transport Council. I hope that, as soon as possible after that meeting,

the Minister will make a statement about cabotage and about the way in which our EEC partners ignore legitimate British interests relating to coastal transport.
Secondly, will the legislation that we are debating tonight enable the Commission both to protect and to promote the interests of the African, Caribbean and Pacific cane sugar producing countries that export part of their produce to EEC member states? An EEC policy is urgently needed to help to deal with the current imbalances in the world sugar market. Such a policy must aim at solving these problems in the interests, and for the benefit, of the developing countries. The ACP countries have little or no choice but to continue to grow cane sugar, regardless of the price that it fetches on the international market.
I am concerned not only about the producers of cane sugar in the Third world but also about those who are employed in the cane sugar refining industry in Great Britain where there are only two cane sugar refineries. One of them is in the constituency of my hon. Friend the Member for Newham, South (Mr. Spearing). The other is in Greenock.
On 2 December 1985, the Minister of State, Ministry of Agriculture, Fisheries and Food moved a House of Commons motion on this issue. It said:
That this House takes note of European Community Documents Nos. 8687/85, 9178/85 and 8781/85 relating to the sugar sector and 11172/84 and 8688/85, relating to the reform of the starch regime, and supports the Government's objectives to secure satisfactory agreements on them which take account of the interests of both producers and users of the products concerned.
On that occasion I was fortunate enough to move an amendment that was accepted by the House. It said:
That this House takes note of Commission Document No. R/1900/73, but declines to approve Commission Document R/ 1957/74 as it makes no provision either for continuing imports, at fair and stable prices, of at least 1·4 million tons of cane sugar from Commonwealth countries, or for the continued existence of and employment in the port sugar refining industry in the United Kingdom, or for securing longer term supplies of domestically refined cane sugar at a fair price to consumer and producer."—[Official Report, 2 December. 1985; Vol. 88, cc. 107 and 114.]
If I may be so immodest, I think that this is an example of principled pragmatism.
I am deeply concerned about the crop that is produced by the ACP countries. At the same time, I have a direct consitituency interest in EEC decisions about imports of raw cane sugar and the refining of that sugar in London and Greenock. The Tate and Lyle cane sugar refinery is the only refinery in Scotland. There were many more at one time, particularly on the lower Clyde. That refinery is an integral element of the Scottish food and drinks industry. Its future has to be assured in the interests of my constituents who work in the refinery. It must also be assured in the interests of all those who are employed in the Scottish food and drinks industry.
Paragraph 4.26 to 4.29 of the White Paper deal with the internal and external fisheries regime. Here again, we are dealing with a traditional industry, but in this case it is largely managed—I go further: it is very much controlled—by decisions made in Brussels.
One of the recommendations of the report on fisheries protection of the Select Committee on Scottish Affairs, of which I am happy to say that I am a member, was:
All third-country boats fishing in Scottish waters should be required to report to DAFS in addition to, or instead of Brussels".


I would say that they should report to Edinburgh rather than to Brussels and that that reporting system should be as efficient and systematic as the one established years ago in Norway, where it works effectively.
Another recommendation was that the 10 per cent. by-catch limit in the pout fisheries should not be raised. I compliment the Ministers who were successful in resisting the stong pressure by the Danish Government when they sought to raise or maintain the derogation of an 18 per cent. by-catch limit. That is a disgracefully high level. It destroys many young fish which are prevented from breeding and Danish fishermen in particular need to be protected from themselves. I should like to see a permanent ruling on the by-catch limit which does not even go as high as 10 per cent.
On the issue of cane sugar and in the interests of the ACP countries and the port cane sugar refining industry employees, and in the interests of the indigenous fishing industry, much more needs to be done by the Government within the Brussels arena.

Sir Anthony Meyer: There is a theatre in Paris called the Theatre de la Huchette. The play has a cast of eight and the theatre holds an audience of 12 and they have been giving the same play for 45 years. The name of the play is "The Bald Prima Donna". That is no reflection on the state of the hair of any hon. Member who has intervened recently, but it fairly well reflects the value of the debates that we have in the House on this subject.
First, the Bill and the quaintly named Single European Act to which it gives effect are the bare inadequate minimum needed to prevent the 12-nation Community from collapsing into inertia and chaos. Secondly, the Government's policies in the EC inadequate, grudging and laggardly though they are—I except from any strictures that I make my hon. Friend the Minister of State whose attachment to this cause has been exemplary throughout, like her predecessor my right hon. and learned Friend the Member for Edinburgh, Pentlands (Mr. Rifkind)—have at least been better in the sense of keeping the Community afloat—just—and keeping the British public opinion reconciled to the idea of Community membership—just—and better than those on offer from any of the other Opposition parties.
Thirdly, the EC, cruelly though it has disappointed even the most modest hopes placed in it, is none the less better than any alternative organisation which could conceivably be brought into existence to replace it, given the much diminished quality of European statesmanship today compared with 30 years ago, and incomparably better than a reversion to the kind of crude nationalist power horse trading, with no binding rules at all, which is what the enemies of the Community in the House and outside apparently want. The key phrase is "binding rules" and that is what the Bill is about.
Those who talk about the vital importance of maintaining our untrammelled right of veto on all decisions undoubtedly strike a responsive chord in the hearts of the British public, although they somewhat overlook the fact that other nations—usually Greece—can use their veto to block decisions which are absolutely vital to this country's interests.
I support the Bill, modest though it is. In the words of Audrey in "As You Like It", it is
An ill-favoured thing, sir, but mine own;

It is the best that we have and we will have to put up with it.

Mr. George Foulkes: This long debate has been enlivened by the learned and lively, if short, contribution from the hon. Member for Clwyd, North-West (Sir A. Meyer). We know that the hon. Gentleman when referring to "The Bald Prima Donna" was not in any way referring to his right hon. Friend the Prime Minister for whom we know he has a deep and abiding affection.
Throughout this wide-ranging debate we have heard a variety of views expressed and I admit that a range of views has been expressed from both sides of the House. We have ranged from the hon. Member for Reigate (Mr. Gardiner), who gave us the long but no doubt extremely relevant saga of Henry and the tee-shirts through the somewhat detailed semantics of the nomenclature about the Assembly, which is now to be called a Parliament. I do not expect that our French partners believe that their legislative chamber is any the less important because it is called an assembly rather than a Parliament. We heard earlier about the drama of the European flag. Apparently it is not to be the stars and stripes—as we might have expected—but merely to be the stars. It is to have 12 yellow stars on, no doubt with some appropriateness a blue background.
Some very important and serious points have been raised during the debate. [Interruption.] I understand that more encouraging news has come from Wembley about the England versus Scotland football match. My hon. Friend the Member for Motherwell, North (Mr. Hamilton) is the bearer of that news. As usual in European debates, many Scottish Members are present, and we were not sure whether we were being deprived of our places at Wembley through our duty to the House. Earlier this evening we thought we were fortunate to be closeted in the Chamber as Scotland were losing, but it now appears as if things are improving as Scotland are back in contention.
My hon. Friend the Member for Cynon Valley (Mrs. Clwyd) raised a serious point in relation to scrutiny and the adequacy of scrutiny in this Parliament, and other hon. Members also raised that point. The Opposition have frequently said that we are only touching on the margin of proper scrutiny of the legislation coming from the European Community. The hon. Member for Southend, East (Mr. Taylor) also stressed that point.
Today, as has been evident, as well as discussing the Second Reading of the Bill, we are considering the sixth-monthly report of the Community. Some of my hon. Friends who have raised issues on that have found difficulty in making their points adequately.
On 5 March a number of suggestions were made to the Government and, somewhat surprisingly, the Government accepted the amendment moved by my hon. Friend the Member for Hamilton (Mr. Robertson) in the name of my right hon. and hon. Friends. That amendment called for a report and improvements in scrutiny arrangements. I asked the Minister a number of questions on that occasion but did not receive many answers in the correspondence that followed. Perhaps she will answer some of my points now.
When will we get the response to the suggestions that were made for improving scrutiny? When will we get a report? When will our proposals be considered, and when


will we get a response to them? We are concerned that scrutiny should be improved within the House and Parliament as a whole.
We are dealing with a modest and, perhaps, reluctant Bill. The hon. Member for Tayside, North (Mr. Walker) will understand that I am not referring to him.

Mr. Bill Walker: The hon. Gentleman will be aware that I have been in my place from the moment that the debate began and that I have not been called to participate in it. He will be aware also that, being a unionist, union means something to me. But if talk about union within Europe is in the same context as union in Scotland, even the hon. Gentleman will understand that that is not quite what we in Scotland believe should happen.

Mr. Foulkes: I allowed the hon. Gentleman to intervene because I realised that he was anxious to speak and had been in his place throughout the debate. I listened carefully to his intervention but I am not sure exactly what he meant or why I gave way to him.
The modest Bill that we are discussing—this may have been forgotten by some of us, and perhaps conveniently by some Conservative Members—is the result of the Milan debacle. The Prime Minister had a tantrum, became intemperate and threatened not to attend the intergovernmental conference. At one stage she would have nothing to do with it. Yet less than a year later we are discussing changes which the Government thought at the time of Milan were unnecessary, unwanted and diversionary.
Let us consider some of these doubtful changes. The new formula of consultative arrangements for the European Parliament is described as new co-operation with the European Parliament. Some Conservative Members may have doubts about the Opposition's views on a number of European Community issues, but if the increased powers that are proposed are at the expense of the non-elected Commission within the Community, we shall consider them sympathetically. That will be our response if the balance of powers within the Community and the delegation of powers are to be changed. If the proposals are to be implemented at the expense of sovereign Governments and sovereign Parliaments, however, we shall examine them more sceptically and be more concerned about them.
The proposals before us do not involve too drastic changes, although we have some concerns. There is to be an extended procedure of Second Readings and the European Parliament will be able to re-examine as well as examine the proposals that come before it. The arrangements for scrutiny in this Parliament will be even more extended and even more difficult. The Foreign Secretary has claimed that the Community's decision—making procedure will be streamlined, but the proposals in the Bill will have the opposite effect and the procedure will become far more cumbersome.
We find it somewhat strange that unanimity will be required for the Council to amend a proposal that has been re-examined by the Commission after being sent back by the Parliament when unanimity is to be abandoned in areas that are of great concern to us.
That brings me to the extension of qualified majority voting in areas which reflect the capitalist views that are so prevalent on the Conservative Benches. Qualified

majority voting will be required on issues relating to goods or action to maximise profits, for example, but not on workers' rights, on the interests generally of those in employment or on enlightened labour legislation, to which my hon. Friend the Member for Cynon Valley referred when talking about parental leave, for example.

Mr. Cash: If the hon. Gentleman reads the list of requirements, he will find that there is a minimum requirement covering the health and safety of workers. If I may say so, he is not quite correct.

Mr. Foulkes: I have read the requirements, and there are many of them. On balance, I believe that I am correct. The unanimity requirement still exists for issues which the Secretary of State for Employment and others in his team hold so dear. There is this worshipping of the internal market above everything else. Everything, it seems, however important it may be, is being sacrificed to getting some development in the internal market.
Even here there are some contradictions between what is said on one side of the Channel and what is said on the other side. A sort of switch happens somehow in the air between the continent of Europe and the United Kingdom.
For example, in the 1986 Commission programme we are told that a
large, frontier-free Europe can only succeed if it is accompanied by greater economic and social cohesion.
Yet the Prime Minister, when she came back from Milan, said:
It is important that the internal market be completed, but I think it can be completed keeping the unanimity rule.
So even in that area there is a contradiction.
In the important area of technology co-operation we also see contradictions. On page 14 of the Single European Act we see that
The community's aim shall be to strengthen the scientific and technological basis of European industry.
But we saw during the Westland saga and the debate over British Leyland that, although the importance of European co-operation was being underlined, it was being sacrificed and sabotaged by some Conservative right hon. and hon. Members because of their commitment to co-operation with the United States of America.
The Commission urges the Community to be united on questions of high technology transfers, intellectual property rights and other things, so why, in the 1986 budget, was the budget allocation for research and innovation cut by 16 per cent.? Why are we not supporting increased funds for EUREKA and the ESPRIT programme? Why are we not supporting this kind of technological co-operation at the European level, the importance of which was described so eloquently by the former Secretary of State for Defence, the right hon. Member for Henley (Mr. Heseltine), who resigned, we understand, on this issue? Why are the Government not supporting that instead of collaborating in the unwanted, unpopular and potentially very dangerous star wars programme with the United States? How can Europe strengthen its scientific and technological basis when its scientists and their work will flow across the Atlantic?
Another important issue which is included in the Single European Act but not in this Bill is the question of foreign policy co-operation, political co-operation, within the European Community. It is on the issue of foreign policy co-operation, as my hon. Friend the Member for Linlithgow (Mr. Dalyell) and other hon. Members have pointed out, that we see the double standards and the


duplicity of the Government in highest relief. The Single European Act, to which our Government are a signatory, calls on all Governments to
endeavour jointly to formulate and implement a European foreign policy.
It says that Governments will undertake
to inform and consult each other on any foreign policy matters of general interest".
It says also that Governments will
avoid any action … which impairs their effectiveness as a cohesive force in international relations or within international organizations".
Where were these expressions of intent, these agreements to which the Government were a signatory, in the decision to withdraw from the United Nations Educational, Scientific and Cultural Organisation? Where were they when the Prime Minister gave consent for British bases to be used for the American bombing of Libya?
The Prime Minister herself said in a paper which she presented to the Fontainebleau summit, entitled "Europe: The Future"—because she was not anticipating then the demand that would be made on her by President Reagan—
By common action of the Community and the Ten, Europe must impress on the United States that unilateral American action … will put the success of Alliance consultation and co-ordination at risk.
The Prime Minister said that. Where did we hear an expression of that when she agreed to the illegal bombing of Libya from United Kingdom bases? [Interruption.] As international lawyers who know about it have clearly said, it was illegal under international law. In the same document the Prime Minister said:
Member states must take more seriously their solemn commitments to take account of partners' views and work for common positions.
How did the Government take account of partners' views and of common positions when they took the unilateral decision to co-operate with the United States of America in that illegal air strike? From UNESCO it is clear that we did not take the European position. Britain was a fig leaf for the Americans who did not want to be the only country withdrawing from UNESCO. It is clear that in the bombing of Libya the Government did not take the European position but were a political fig leaf for the United States. Let us hope that in a third and vital area of foreign policy, in relation to central America, about which President Reagan is currently putting forward a distorted and twisted view of the political reality, the Government will take the European view and not act as Reagan's poodle as they have done in other areas.
Some hon. Members on the Government side describe the Opposition view and the view of some European countries as anti-American. [Interruption.] We hear it again in barracking from a sedentary position. That is a simplistic and distorted view and I suggest that it is also a mischievous view. We are against some aspects of the foreign policy of President Reagan and the present US Administration, but that does not mean that we are anti-American, against the people of the United States of America.
It may come as a surprise to some hon. Members on the Government side when I say that I and my colleagues disagreed with some aspects of British foreign policy and British domestic policy, but that that does not mean that we are anti-British. The same logic applies to the United States. I endorse the argument of many of my hon. Friends that it is the Conservative party that is unpatriotic and not

the Opposition. We saw that in the saga of British Leyland and Westland and we see it in the way in which Conservative Members encourage the investment of British capital overseas.

Mrs. Chalker: Nonsense.

Mr. Foulkes: The hon. Lady will have an opportunity to refute my arguments more eloquently than by saying nonsense from a sedentary position.
One of the other issues untouched by this Bill is the imbalance of the Community budget. My hon. Friend the Member for Newham, North-East (Mr. Leighton) spoke about that, the runaway expenditure on the common agricultural policy. As my hon. Friend said, the money is not going to the farmer; it is going to the owners of the cold stores and the grain silos. Those are the people who make money because a large amount is spent on storing and destroying the surpluses, and that is not always done in support of the farmer. The scandal we heard recently about butter and beef being exported to Libya at preferential prices caused great indignation.
The budget crisis in the Community is much worse than the Government will admit. It is much worse than most hon. Members realise. The structure of the funds of that budget are in deep trouble. Some regional and social expenditure is already frozen. I hope that the hon. Lady will tell us the effect of the freezing of regional and social funds for projects in the Community. We are told by placards and other means when money from these funds is being spent in the United Kingdom. I hope that the hon. Lady will tell us the effect of freezing those funds. We see from today's newspapers that the farm Commissioner admits that agricultural expenditure will push the expenditure of the Community through the 1·4 per cent. VAT ceiling. As Conservative Members will know, Spanish and Portuguese farmers are no fools. That rise is before taking account of the fact that they will get advisers over to tell them how to make the most out of the intervention support that they can get from the CAP and about all the extra help that can be obtained by increasing production. Even the current predictions for budget overspend will, in reality, prove modest.
But, of course, there will be the usual juggling, fiddling and holding over of expenditure in order to try to balance the budget. There will no doubt be requests for supplementary budgets, and requests following intergovernmental agreements. Despite our questions, we have never yet been told by any Minister what guarantee there is that there will be no further demands for additional spending during the current financial year. If a local authority in the United Kingdom asked for more money, it would be in difficulties. If, for example, that authority was Liverpool or Lambeth, it would be dragged through the courts. But that does not happen to the Community. It has an open-ended agreement to spend, and seems to have a blank cheque from the Government.
Given the growing commitments, the demands on the regional and social funds, and the fact that agriculture expenditure is out of control, it is not surprising that one area of expenditure is being pushed further and further down the list of priorities. I refer to the United Kingdom rebate. The Minister shakes her head, but perhaps she will confirm later that not one penny of the 1985 refund has been paid. When will it be paid? Can she confirm whether


the much-vaunted automaticity will apply? My information is that, given the way that the Community budget is going, it will not apply. But I am prepared to be corrected by the Minister and to accept her assurances if she can give any.
As the hon. Member for Clwyd, North-West pointed out, in such debates the same performers often make similar speeches. There are sometimes different stories, anecdotes or nuances. But those speeches reflect the fact that during the past two years the Government have wasted their opportunities in the Community. At the end of those two years we are no nearer to solving the fundamental problem to which hon. Members constantly seek a solution. We are no nearer to controlling agriculture expenditure. Despite repeated assurances that there will be strict budgetary control, we keep hearing that that expenditure is out of control. We have seen no real action to tackle unemployment, let alone to reverse the growing tide of unemployment which Jacques Delors described at the beginning of his period of office.
We ask the House to oppose the Bill. A year ago the Government themselves said that such a Bill was unnecessary, irrelevant and would divert us from the real problems facing the country and the Community. I hope that the House will oppose the Bill tonight.

The Minister of State, Foreign and Commonwealth Office (Mrs. Lynda Chalker): As usual, and as might have been expected, we have had a lively and wide-ranging debate. The views of some hon. Members would be very depressing if we did not take account of economic facts, the common sense of industry and of speeches like those of my right hon. and learned Friend the Member for Hexham (Mr. Rippon), my hon. Friends the Members for Reigate (Mr. Gardiner) and for Bournemouth, West (Mr. Butterfill) and of many of my other hon. Friends. How right my right hon. and learned Friend the Member for Hexham was when he said that we should seek to deepen and broaden co-operation where it is to our mutual advantage. That is exactly what we are aiming for, and exactly what the Bill will assist us to do.
After all the efforts that we have made to achieve a stronger Europe, it is saddening to find how closed some minds still are to opportunities in the wider Common Market of Europe. I refer to the collaboration in research and technology and co-operation to get better use of regional development funds. We need to look forward to the needs of Europe in a changing world.
Many misconceptions have been voiced by opponents of the Bill tonight, but we should be reminded of what the Bill is about. It gives effect, in United Kingdom law, to the changes in the treaties establishing the European Community. These were agreed by the Prime Minister and other European Community Heads of Government in Luxembourg in December 1985. These are the first such changes since the Community institutions were first formed in 1957, and, as many would say, it is high time that we moved the European Community into line with the great changes that have occurred in this country. The Bill not only gives effect—

Mr. Budgen: Tell us what that means.

Mrs. Chalker: My hon. Friend, who has been absent for a large part of this debate, is well aware of the technological and many other changes that have taken place in nearly 30 years. If he has not, I wonder what he is doing in the House now, because he must have been deaf to what was going on.
The Single European Act, which will become a Community treaty, makes provision for a number of important areas. First, there is the limited extension of qualified majority voting to meet the important 1992 target for the completion of the internal market. I shall come back to this in a minute. Secondly, there is the updating of the treaty to take account of the policies on technology and environment to which a number of hon. Members and right hon. Members referred. Thirdly, there is the reference in the treaty to the European regional development fund and better co-ordination of the structural funds. Those are all matters which we believe to be important.
Fourthly, there is a procedure for co-operation between the Council of Ministers and the European Parliament, where the linkages have not been good enough in the past and must be improved. Fifthly, there is the establishment of a court of first instance to relieve the overload on the European Court of Justice, where over 50 per cent. of its cases concern internal staff matters. Sixthly, there is co-operation on foreign policy. Those are all issues which, from time to time, hon. Members have said are necessary. They are being combined together in a useful piece of legislation.
What the Single European Act will not do—and I think it is worth emphasising this—is that it will not lead to a federal union, which is so much feared by the hon. Member for Walthamstow (Mr. Deakins). The emphasis will be on political and practical co-operation. It will not enable the European Parliament to force its views on the Council, and it will not affect the Luxembourg compromise. It will not give the Commission a say in running foreign policy. All these fears have been expressed during the debate. What it will do is to enable members of the European Community to work more easily together for the mutual benefit of each of the 12 member nations in the years ahead.
The hon. Member for Hamilton (Mr. Robertson) made some play, as did the hon. Member for Carrick, Curnnock and Doon Valley (Mr. Foulkes), of the whole question of why the Bill was being introduced and asked why we had to amend the treaty, bearing in mind that my predecessor, my right hon. and learned Friend, the Member for Edinburgh, Pentlands (Mr. Rifkind) and others, said both before and at the time of the Milan compromise that there would be no need to amend the treaty.
Let me take hon. Members back to the situation at the time when my right hon. and learned Friend made his comment. We always believed that we should be able to make progress by political agreement, but at that time there were certain wide-ranging and ill-considered amendments. We did not believe that those would be to the advantage of the Community or this country. At that time we thought that they might not go away, but we were able to focus the discussion on the limited treaty changes in which we believed. We managed to focus the discussion on practical objectives. Those are the practical objectives with which the Bill deals—the completion of the


Common Market and improved efforts in research and development. Those are both in themselves very important for the creation of employment.
I am sorry to find that yet again certain Opposition Members have turned opportunity into failure. What we did at Milan and through the inter-governmental conference following Milan was to turn what had started as unfavourable to our advantage. That is a worthwhile result. If the hon. Member for Carrick, Cumnock and Doon Valley had any experience of this, which he has not so far had, he would know that it is worth while to change from an unfavourable position, with which we would not have joined, to one which will benefit this country.

Mr. George Robertson: We are all intrigued to hear the explanation of how humiliation was turned into triumph. May I remind the Minister of one more sentence of her predecessor, who is now Secretary of State for Scotland? In the debate last June he said:
Those who wish to see an intergovernmental conference of the kind recommended by the majority in the Dooge committee, with a view to amending the treaty, are misguided about the best way of making progress in the Community."—[Official Report, 20 June 1985; Vol. 81, c. 473.]

Mrs. Chalker: The hon. Gentleman knows exactly why that was. It was because some of the Spinelli proposals and other ideas that were put forward in that committee were not in line with the way in which the Community needed to develop. They have since been dropped.
I must return to some questions that were posed by hon. Members. My right hon. Friend the Member for Taunton (Sir E. du Cann) asked about a special Committee to consider the Bill. The Bill will be fully considered by a Committee of the whole House. That reflects the importance of the measure. I believe that that is the answer that most right hon. and hon. Members want to hear. Therefore, it would not be appropriate at this stage to establish a special Committee procedure.
Several hon. Members were, not for the first time, excited because they believe that the Bill will remove the United Kingdom's power of veto, give greater powers to the European Parliament and reduce the role of other institutions. I am afraid that those opponents of the Bill are allowing themselves to be drawn into an unreal world.
I shall deal first with the Luxembourg compromise. What was it? It was a political agreement that, where majority voting applies, a member state should be able to ask for a vote to be postponed where it considered its important interests to be at stake: to delay and postpone, possibly indefinitely. It was never enshrined in the treaty. What is enshrined in the treaty are the rules on unanimous or majority voting according to the different topics which the treaty covers. No doubt we shall come to that in Committee.
We did not lightly agree to move from the veto inherent in unanimity to the lack of an absolute treaty-based veto inherent in qualified majority voting. That was why the treaty changes are limited to those areas where majority voting will serve our long-standing objective—the completion of the internal market. That is why we have retained essential safeguards for small and medium-sized businesses and in health matters. In these circumstances, the Luxembourg compromise is an additional, but not our principal, safeguard. It is not affected by the Bill.
We successfully and explicitly invoked the compromise on the fisheries question under the last Labour

Government in July 1978. Others have done so more recently. Therefore, the compromise is not dead. It is still there, and will remain there. More usually, it is used implicitly. Discussion continues until a compromise is reached that is acceptable to all delegations. The Luxembourg compromise is a weapon of last resort, but we need it in the last resort, and I sincerely hope that none of this will come to the House at some time in the future.

Mr. Leighton: To give an example of when the Luxembourg compromise worked the Minister has had to go back to 1978, which is a long time ago. She knows that the Germans stopped us using the veto on agricultural prices. Who decides when the Luxembourg compromise can be used?

Mrs. Chalker: The hon. Gentleman poses a question dating back to 1982. As my right hon. and learned Friend the Foreign Secretary said at the beginning of the debate, the reason why our attempted use of the Luxembourg compromise did not succeed in 1982 was that the grounds were not relevant to the case that we were putting. However, since 1978 the Luxembourg compromise has been successfully used by the Danes on fish, the Irish on milk, and Italy on steel. If we need to use it in future, we will do so.
I can only say to the hon. Gentleman that when a member state's important interest is at stake it is right that discussion should continue until agreement is reached. We propose that this should be done through special procedures to ensure that the Luxembourg compromise is used only when it is really necessary and that, in general, discussion should continue to reach a reasonable answer.
My hon. Friend the Member for Wolverhatnpton, South-West (Mr. Budgen) said by way of intervention that an enhanced role for the European Parliament would mean a reduced role for other institutions. That is a dangerous fallacy. That is not the position; life is not a zero sum game. By enabling the European Parliament to play a more effective and constructive role in European affairs we can increase the potential of the institutions. The point of decision remains with the Council, but in future it will be able to take decisions with more knowledge of the views of the Parliament and more time to take account of them. That should improve the role for the European Parliament that we agreed, on our accession to the Community, should be part of the future development of this country.

Mr. Teddy Taylor: rose—

Mrs. Chalker: I am coming to my hon. Friend now. He said that the Bill should be opposed because we should be using existing powers to solve existing problems. I see the point he seeks to make. Of course, we must ensure that the Community tackles the existing problems, such as the problems of agricultural surpluses, which must be reduced. We have been seeking to do that, but that is no reason why we should refrain from making changes aimed at solving other problems of equal importance, such as the continuing lack of a real internal market. There is no reason to pass up opportunities for the future just because we have to attend to problems that already exist.

Mr. Teddy Taylor: Can the Minister answer the simple question we have been asking through the whole debate: what has changed since July last year? The Minister has said that we need majority voting to complete


the internal market. Does she recall that the Prime Minister said, to the acclaim of hon. Members on both sides of the House, when asked about completing the internal market:
It is important that the internal market be completed, but I think it can be completed keeping the unanimity rule."—[Official Report, 2 July 1985; Vol. 82, c. 189.]
Most of us would wish to keep the unanimity rule on directives which could be quite vital to many of our industries. That was the Government policy in July, which was supported. What has changed?

Mrs. Chalker: When the intergovernmental conference sat down to discuss all the matters involved, it was not just other Ministers but the Prime Minister as well who accepted at the Luxembourg meeting that there was a better way of achieving a speedier and more thorough completion of the internal market. Thus we are not immovable; we are prepared to do what is right for the future of the Community and not to be blinkered, as my hon. Friend would have us blinkered.
I will write to the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) on his question about voting procedures, as time is short. Above all, we have sought only to work with majority voting where it could be in our interest. We have selected areas on that basis. Some have implied that there is majority voting against United Kingdom interests. There is no question of that. There is no reason why we should continue to insist on a consensus where no member state has an important interest at stake. We cannot criticise the Community for its inability to take decisions, while, on the other hand, we refuse to allow practical improvements that could well assist us in achieving what we stand for.
The hon. Member for Linlithgow (Mr. Dalyell) asked specifically about the European cancer initiative. That is an area in which we wish to see effective action. A group of distinguished experts, on which the United Kingdom is represented, is meeting to consider the details. I will write to the hon. Gentleman about the matter.
Hon. Members have commented on a wide variety of issues, including cabotage and sugar. My right hon. Friend the Minister for Overseas Development is en route to the EEC-ACP conference in Barbados, where we hope to secure a real answer to the problems that we discussed over a month ago. There has certainly been movement in that area.
The hon. Member for Hamilton made a number of comments about political co-operation. He said that there had been nothing more than statements. We have certainly had a great deal more than statements. There are plenty of examples. Some of them may never hit the press because they are successful and quiet. They occur because of positive action taken between Foreign Ministers meeting, not only in formal sessions on European co-operation, but in the margins of those meetings. It was with some difficulty that, in January, we eventually found a solution and made some moves on terrorism. They were not what we all wanted. We knew that we would have to do more. We therefore set up a working group to consider further ways of coming together to prevent terrorism.
We have worked together on the issue of South Africa. I recall the complete ban on Argentine exports to the EEC that was imposed within days of the invasion. We have also co-operated in less visible ways on practical matters such as consular help and evacuation plans. In the case of

the evacuation of Aden, the EEC members played their part. There was also the case of the evacuees, leaving via Zaire, who had been captured by UNITA. Such consultations are all part of the business of political co-operation. People are wrong to reject statements by the Twelve as unimportant. When the Twelve speak together with one clear voice they can do far more than they can do individually. That was certainly the case in the meeting that I attended with my right hon. and learned Friend last Monday, when we made an important step forward that has not been mentioned today. The 12 countries agreed not only that they would expel unwanted people from their own countries but they would co-operate so as not to allow those people into any other part of the Community. That was the first time that such a degree of political co-operation had been attained.

Mr. Foulkes: Why is the hon. Lady looking at me?

Mrs. Chalker: If the cap fits, wear it.
I believe that it was the hon. Member for Walthamstow who said that political co-operation did nothing for the North-South question. He said that we should use the Commonwealth instead. In reality, our partners in Europe are well aware of the importance of the Commonwealth. Many of them wish that they too had the connections that we have maintained through the Commonwealth. They are also well aware that they have a role in assisting the developing countries—not only the Commonwealth ones—and that role is much discussed in a number of different ways.
The hon. Member for Linlithgow asked how the European political co-operation secretariat could be made accountable. The secretariat is there only to help the presidency. It works under the authority of the presidency on tasks which are delegated at the presidency's discretion. It does not carry on in its own sweet way, which is what the hon. Gentleman implied by his remarks. It is there to take on the administrative burden of political co-operation which is currently shouldered entirely by the presidency. There will be only six officials on secondment from their national Administrations. They will have a small support staff, and each presidency will retain full responsibility and control for all that goes on politically. I hope that that answers the hon. Gentleman's question.
From the many comments that have been made it is clear that not all hon. Members realise how important a Community policy against inflation and unemployment is. Tackling unemployment is a major priority of the Community. All the member Governments of the Community, be they Left or Right, agree that that can be done through a consistent economic policy framework to improve supply and demand. In 1984 the Council agreed that sustained growth could be achieved only in the context of moderation in the evolution of real wages and a pause in the growth of current public expenditure.

Mr. George Robertson: Spending on infrastructure?

Mrs. Chalker: Yes, and spending on infrastructure. I shall come to that shortly if the hon. Gentleman will allow me.
The Community also agreed that the key to the creation of jobs was to open up the internal market, not just for goods, but for services and professions. We have already heard how long it has taken to achieve success and agreement over the professions.
We shall also have the establishment of European standards for products and an improvement in the Community's performance in advanced technology. Those have all been long-standing goals of this country. I remind my hon. Friends that they are all also major aspects of the Single European Act. It is due to an initiative of this Government that the Community is now committed to lifting the burdens on business and enterprise by rigorously examining the regulatory burden of existing and new Community legislation. The Community has a very important role to play there and in promoting labour market flexibility. That is a key issue in the creation of employment opportunities.
It was President Kennedy who said that the rising tide lifts all ships. That is true. If we sustain a soundly based growth this will be the key to the very thing that hon. Members are asking about in tackling the problems of unemployment.
Growth in the United Kingdom was higher between 1983 and 1985 than in any other member state, despite the miners' strike. We shall continue, as we have done in the past year and longer, to create more jobs in this country. We need those greater markets and, as my hon. Friend the Member for Stafford (Mr. Cash) said, we need to use the mechanism effectively.
Opposition Members do not seem to realise the factual position. There is no proposal to freeze the social or regional funds. In fact, the 1986 budget shows an increase of 20 per cent. for the regional and social funds. The hon. Member for Carrick, Cumnock and Doon Valley obviously wants me to deal with budgetary matters. In the time available I must say that whereas there has been disagreement about how we proceed, we are determined to contain the spending of the agricultural budget. The European Parliament has also given its name to that in the past week.
I was asked about the scrutiny procedures. We hope to take up the idea for further information to be contained in explanatory memoranda—we are willing to accept that recommendation. We are also willing to accept the second idea, that Departments should be on the alert to pick up anything that occurs after a submission of an original explanatory memorandum. I will write to the hon. Member for Stafford about the third recommendation. It is not as easy to address.
We are in our 14th year of membership, the 29th year of the Community. We have to look forward far more actively and take up opportunities. We need to build for the future. We need better research and development, better technology and better industry. Vision and practicality are needed to get the best opportunities for Britain and Europe. To achieve that, we need to update the treaties in unison with 11 other member countries. The Bill helps us to do that, and I commend it to the House.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 319, Noes 160.

Division No. 154]
[10 pm


AYES


Adley, Robert
Arnold, Tom


Alexander, Richard
Ashby, David


Alison, Rt Hon Michael
Ashdown, Paddy


Alton, David
Aspinwall, Jack


Amery, Rt Hon Julian
Atkins, Rt Hon Sir H.


Amess, David
Atkins, Robert (South Ribble)


Ancram, Michael
Atkinson, David (B'm'th E)





Baker, Rt Hon K. (Mole Vall'y)
Franks, Cecil


Baker, Nicholas (Dorset N)
Fraser, Peter (Angus East)


Baldry, Tony
Freeman, Roger


Banks, Robert (Harrogate)
Gale, Roger


Beaumont-Dark, Anthony
Gardiner, George (Reigate)


Beith, A. J.
Gardner, Sir Edward (Fylde)


Bellingham, Henry
Garel-Jones, Tristan


Bendall, Vivian
Gilmour, Rt Hon Sir Ian


Bennett, Rt Hon Sir Frederic
Glyn, Dr Alan


Benyon, William
Goodhart, Sir Philip


Best, Keith
Goodlad, Alastair


Biffen, Rt Hon John
Gorst, John


Biggs-Davison, Sir John
Gow, Ian


Blackburn, John
Gower, Sir Raymond


Blaker, Rt Hon Sir Peter
Greenway, Harry


Bonsor, Sir Nicholas
Gregory, Conal


Bottomley, Peter
Griffiths, Sir Eldon


Bottomley, Mrs Virginia
Griffiths, Peter (Portsm'th N)


Bowden, A. (Brighton K'to'n)
Grist, Ian


Bowden, Gerald (Dulwich)
Ground, Patrick


Boyson, Dr Rhodes
Grylls, Michael


Braine, Rt Hon Sir Bernard
Hamilton, Hon A. (Epsom)


Brandon-Bravo, Martin
Hampson, Dr Keith


Bright, Graham
Hanley, Jeremy


Brinton, Tim
Hannam, John


Brittan, Rt Hon Leon
Hargreaves, Kenneth


Brooke, Hon Peter
Harris, David


Browne, John
Haselhurst, Alan


Bruce, Malcolm
Havers, Rt Hon Sir Michael


Bruinvels, Peter
Hayes, J.


Bryan, Sir Paul
Hayhoe, Rt Hon Barney


Buchanan-Smith, Rt Hon A.
Hayward, Robert


Buck, Sir Antony
Heathcoat-Amory, David


Bulmer, Esmond
Meddle, John


Burt, Alistair
Henderson, Barry


Butcher, John
Hickmet, Richard


Butler, Rt Hon Sir Adam
Hicks, Robert


Butterfill, John
Higgins, Rt Hon Terence L.


Carlile, Alexander (Montg'y)
Hogg, Hon Douglas (Gr'th'm)


Carlisle, Kenneth (Lincoln)
Holland, Sir Philip (Gedling)


Carlisle, Rt Hon M. (W'ton S)
Holt, Richard


Carttiss, Michael
Hordern, Sir Peter


Cash, William
Howard, Michael


Chalker, Mrs Lynda
Howarth, Alan (Stratf'd-on-A)


Channon, Rt Hon Paul
Howe, Rt Hon Sir Geoffrey


Chapman, Sydney
Howell, Rt Hon D. (G'ldford)


Chope, Christopher
Howell, Ralph (Norfolk, N)


Churchill, W. S.
Howells, Geraint


Clark, Hon A. (Plym'th S'n)
Hubbard-Miles, Peter


Clark, Dr Michael (Rochford)
Hunt, David (Wirral W)


Clegg, Sir Walter
Hunt, John (Ravensbourne)


Cockeram, Eric
Hunter, Andrew


Colvin, Michael
Irving, Charles


Coombs, Simon
Jackson, Robert


Cope, John
Jenkin, Rt Hon Patrick


Corrie, John
Johnson Smith, Sir Geoffrey


Couchman, James
Johnston, Sir Russell


Cranborne, Viscount
Jones, Gwilym (Cardiff N)


Crouch, David
Jones, Robert (Herts W)


Currie, Mrs Edwina
Joseph, Rt Hon Sir Keith


Dickens, Geoffrey
Kellett-Bowman, Mrs Elaine


Douglas-Hamilton, Lord J.
Key, Robert


Dunn, Robert
King, Roger (B'ham N'field)


Durant, Tony
King, Rt Hon Tom


Dykes, Hugh
Kirkwood, Archy


Emery, Sir Peter
Knight, Greg (Derby N)


Evennett, David
Knight, Dame Jill (Edgbaston)


Eyre, Sir Reginald
Knowles, Michael


Fairbairn, Nicholas
Knox, David


Fallon, Michael
Lamont, Norman


Farr, Sir John
Lang, Ian


Favell, Anthony
Latham, Michael


Fenner, Mrs Peggy
Lawson, Rt Hon Nigel


Fletcher, Alexander
Leigh, Edward (Gainsbor'gh)


Fookes, Miss Janet
Lennox-Boyd, Hon Mark


Forman, Nigel
Lewis, Sir Kenneth (Stamf'd)


Forsyth, Michael (Stirling)
Lilley, Peter


Forth, Eric
Livsey, Richard


Fowler, Rt Hon Norman
Lloyd, Ian (Havant)


Fox, Marcus
Lloyd, Peter (Fareham)






Lord, Michael
Rifkind, Rt Hon Malcolm


Lyell, Nicholas
Rippon, Rt Hon Geoffrey


McCrindle, Robert
Roberts, Wyn (Conwy)


McCurley, Mrs Anna
Robinson, Mark (N'port W)


Macfarlane, Neil
Roe, Mrs Marion


MacGregor, Rt Hon John
Ross, Stephen (Isle of Wight)


MacKay, Andrew (Berkshire)
Rossi, Sir Hugh


MacKay, John (Argyll &amp; Bute)
Rost, Peter


McNair-Wilson, M. (N'bury)
Rowe, Andrew


McNair-Wilson, P. (New F'st)
Rumbold, Mrs Angela


McQuarrie, Albert
Ryder, Richard


Madel, David
Sackville, Hon Thomas


Major, John
Sainsbury, Hon Timothy


Malins, Humfrey
St. John-Stevas, Rt Hon N.


Malone, Gerald
Sayeed, Jonathan


Maples, John
Shaw, Giles (Pudsey)


Marshall, Michael (Arundel)
Shelton, William (Streatham)


Mates, Michael
Shepherd, Colin (Hereford)


Maude, Hon Francis
Shersby, Michael


Mawhinney, Dr Brian
Silvester, Fred


Maxwell-Hyslop, Robin
Sims, Roger


Mayhew, Sir Patrick
Skeet, Sir Trevor


Meadowcroft, Michael
Soames, Hon Nicholas


Mellor, David
Speed, Keith


Merchant, Piers
Spencer, Derek


Meyer, Sir Anthony
Squire, Robin


Miller, Hal (B'grove)
Stanbrook, Ivor


Mills, Iain (Meriden)
Stanley, Rt Hon John


Mills, Sir Peter (West Devon)
Steel, Rt Hon David


Miscampbell, Norman
Steen, Anthony


Mitchell, David (Hants NW)
Stevens, Lewis (Nuneaton)


Monro, Sir Hector
Stewart, Allan (Eastwood)


Montgomery, Sir Fergus
Stewart, Ian (Hertf'dshire N)


Moore, Rt Hon John
Stradling Thomas, Sir John


Morris, M. (N'hampton S)
Tapsell, Sir Peter


Morrison, Hon C. (Devizes)
Taylor, John (Solihull)


Morrison, Hon P. (Chester)
Tebbit, Rt Hon Norman


Moynihan, Hon C.
Temple-Morris, Peter


Mudd, David
Thatcher, Rt Hon Mrs M.


Neale, Gerrard
Thompson, Donald (Calder V)


Needham, Richard
Thompson, Patrick (N'ich N)


Nelson, Anthony
Thorne, Neil (Ilford S)


Neubert, Michael
Thornton, Malcolm


Newton, Tony
Thurnham, Peter


Nicholls, Patrick
Townsend, Cyril D. (B'heath)


Normanton, Tom
Tracey, Richard


Norris, Steven
Trippier, David


Onslow, Cranley
Twinn, Dr Ian


Oppenheim, Rt Hon Mrs S.
van Straubenzee, Sir W.


Osborn, Sir John
Vaughan, Sir Gerard


Ottaway, Richard
Viggers, Peter


Page, Richard (Herts SW)
Waddington, David


Parkinson, Rt Hon Cecil
Wainwright, R.


Patten, Christopher (Bath)
Wakeham, Rt Hon John


Patten, J. (Oxf W &amp; Abgdn)
Walden, George


Pattie, Geoffrey
Waller, Gary


Pawsey, James
Walters, Dennis


Peacock, Mrs Elizabeth
Wardle, C. (Bexhill)


Percival, Rt Hon Sir Ian
Warren, Kenneth


Pollock, Alexander
Watson, John


Porter, Barry
Watts, John


Portillo, Michael
Wheeler, John


Powell, William (Corby)
Whitfield, John


Powley, John
Whitney, Raymond


Prentice, Rt Hon Reg
Wolfson, Mark


Price, Sir David
Wood, Timothy


Prior, Rt Hon James
Woodcock, Michael


Pym, Rt Hon Francis
Yeo, Tim


Raffan, Keith
Young, Sir George (Acton)


Rathbone, Tim
Younger, Rt Hon George


Rees, Rt Hon Peter (Dover)



Renton, Tim
Tellers for the Ayes:


Rhodes James, Robert
Mr. Carol Mather and


Rhys Williams, Sir Brandon
Mr. Robert Boscawen.


Ridsdale, Sir Julian





NOES


Abse, Leo
Archer, Rt Hon Peter


Adams, Allen (Paisley N)
Ashley, Rt Hon Jack


Aitken, Jonathan
Atkinson, N. (Tottenham)





Bagier, Gordon A. T.
John, Brynmor


Banks, Tony (Newham NW)
Leadbitter, Ted


Barnett, Guy
Leighton, Ronald


Barron, Kevin
Lewis, Terence (Worsley)


Beckett, Mrs Margaret
Litherland, Robert


Bell, Stuart
Lloyd, Tony (Stretford)


Benn, Rt Hon Tony
Lofthouse, Geoffrey


Bennett, A. (Dent'n &amp; Red'sh)
Loyden, Edward


Bermingham, Gerald
McCartney, Hugh


Bidwell, Sydney
McDonald, Dr Oonagh


Blair, Anthony
McKelvey, William


Boothroyd, Miss Betty
MacKenzie, Rt Hon Gregor


Boyes, Roland
McNamara, Kevin


Bray, Dr Jeremy
McTaggart, Robert


Brown, Gordon (D'f'mline E)
McWilliam, John


Brown, Hugh D. (Provan)
Madden, Max


Brown, M. (Brigg &amp; Cl'thpes)
Marek, Dr John


Brown, N. (N'c'tle-u-Tyne E)
Marshall, David (Shettleston)


Budgen, Nick
Martin, Michael


Caborn, Richard
Mason, Rt Hon Roy


Callaghan, Rt Hon J.
Maxton, John


Callaghan, Jim (Heyw'd &amp; M)
Maynard, Miss Joan


Campbell-Savours, Dale
Meacher, Michael


Carter-Jones, Lewis
Michie, William


Clark, Dr David (S Shields)
Mikardo, Ian


Clarke, Thomas
Moate, Roger


Clay, Robert
Morris, Rt Hon A. (W'shawe)


Clelland, David Gordon
Morris, Rt Hon J. (Aberavon)


Clwyd, Mrs Ann
Nellist, David


Cocks, Rt Hon M. (Bristol S)
Oakes, Rt Hon Gordon


Conlan, Bernard
O'Brien, William


Conway, Derek
Orme, Rt Hon Stanley


Cook, Frank (Stockton North)
Park, George


Corbett, Robin
Pavitt, Laurie


Corbyn, Jeremy
Pendry, Tom


Craigen, J. M.
Pike, Peter


Crowther, Stan
Powell, Rt Hon J. E.


Cunningham, Dr John
Powell, Raymond (Ogmore)


Dalyell, Tam
Proctor, K. Harvey


Davies, Rt Hon Denzil (L'lli)
Radice, Giles


Davies, Ronald (Caerphilly)
Randall, Stuart


Davis, Terry (B'ham, H'ge H'l)
Raynsford, Nick


Deakins, Eric
Redmond, Martin


Dixon, Donald
Rees, Rt Hon M. (Leeds S)


Dobson, Frank
Richardson, Ms Jo


Dormand, Jack
Roberts, Ernest (Hackney N)


Douglas, Dick
Robertson, George


Dubs, Alfred
Rowlands, Ted


du Cann, Rt Hon Sir Edward
Ryman, John


Duffy, A. E. P.
Sedgemore, Brian


Dunwoody, Hon Mrs G.
Sheerman, Barry


Eastham, Ken
Sheldon, Rt Hon R.


Evans, John (St. Helens N)
Shore, Rt Hon Peter


Faulds, Andrew
Short, Ms Clare (Ladywood)


Fields, T. (L'pool Broad Gn)
Silkin, Rt Hon J.


Fisher, Mark
Skinner, Dennis


Flannery, Martin
Soley, Clive


Forrester, John
Stewart, Rt Hon D. (W Isles)


Foster, Derek
Stott, Roger


Foulkes, George
Straw, Jack


Fraser, J. (Norwood)
Taylor, Teddy (S'end E)


George, Bruce
Thomas, Dafydd (Merioneth)


Gilbert, Rt Hon Dr John
Thompson, J. (Wansbeck)


Godman, Dr Norman
Thorne, Stan (Preston)


Gould, Bryan
Tinn, James


Gourlay, Harry
Torney, Tom


Hamilton, James (M'well N)
Walker, Bill (T'side N)


Hamilton, Neil (Tatton)
Wardell, Gareth (Gower)


Harman, Ms Harriet
Wareing, Robert


Harrison, Rt Hon Walter
White, James


Haynes, Frank
Wigley, Dafydd


Healey, Rt Hon Denis
Williams, Rt Hon A.


Heffer, Eric S.
Winnick, David


Hogg, N. (C'nauld &amp; Kilsyth)
Young, David (Bolton SE)


Holland, Stuart (Vauxhall)



Home Robertson, John
Tellers for the Noes:


Hoyle, Douglas
Mr. Chris Smith and


Hughes, Roy (Newport East)
Mr. Allen McKay


Hughes, Sean (Knowsley S)

Question accordingly agreed to.

Bill read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Maude.]

Committee tomorrow.

Orders of the Day — British Pensioners (Canada)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Maude.]

Sir John Farr (Harborough): I want to raise the plight of British old-age pensioners who are living in Canada. At the moment there are about 41,000—[Interruption.]

Mr. Deputy Speaker (Sir Paul Dean): Order. Perhaps the hon. Gentleman will wait just for a moment. He will not lose time. Sir John Farr.

Sir John Farr: I wish to raise the plight of British old-age pensioners who are living in Canada. At the moment there are about 41,000 British old-age pensioners in Canada. The fact that they are there does not mean in any sense that they have turned their backs on Britain. Many of them are proud to retain their links with Britain. They went to Canada for family reasons, possibly because their last living relatives are there and they decided to join them.
Most of these people paid full national insurance contributions during their working lives in Britain. However, the moment they left our shores, the pensions for which they worked all their lives were frozen. Many of them spent a full working life in Britain and did not leave this country until late in life.
I submit that this is manifestly unfair and unjust and that no civilised country should tolerate it. I am glad to say that this Government and previous Governments have worked out with no fewer than 27 other countries throughout the world a social security agreement or convention, whereby British pensioners living in those countries are entitled to receive regular uprating increases in their pensions. But that list does not include Canada.
Why is this? Why has Canada been excluded from a reciprocal agreement with many other countries in the world? As I have already said, there are about 41,000 British pensioners in Canada. Due to the absence of a social security agreement, no fewer than 20,000 of them receive a pension of less than £10 a week. In Canadian terms, that is about $15. I know from correspondence with the pensioners or their representatives that the hardship involved is very real. One may say that for one reason or another they chose to live in Canada and that the Canadian Government should assist them in their time of need. However, the Canadian Government will not provide financial help for people unless they qualify for financial aid by having been resident in Canada for at least 10 years.
Both Westminster and Whitehall are not unaware of the paradox that faces British pensioners in Canada. As long ago as the 1970s our Government expressed interest in a social security agreement with Canada. In 1983, United Kingdom officials said that the Government might be prepared to allocate the necessary funds. Indeed, later that year the need for an urgent agreement was discussed by my right hon. Friend the Prime Minister and Mr. Trudeau at a meeting of Commonwealth Prime Ministers.
However, in November 1983 the Canadian Government were informed that the British Government could not proceed with the social security agreement, and there the situation remains. As my hon. Friend the Under-Secretary told me only last Friday in reply to questions that I tabled on this, officials from his Department and the Canadian Department of Health and Welfare have work in hand on the agreement but the finance "is not available".


What finance is needed? In another reply last Friday my hon. Friend was kind enough to say that annually to uprate would cost about £4·8 million in the first year. I can possibly add a little more information because of my understanding of the discussions that have been taking place. As I understand it—I am speaking with fairly good authority—the tentative agreement that was reached between Canadian and British officials but not implemented at the end of 1983 would have cost the British Government £4 million in uprating pensions for the first year and the Canadian Government $21·5 million.
I was a little disappointed that in his reply to me last Friday my hon. Friend mentioned a figure of £35 million as a possible cost to the United Kingdom Government. I was disappointed because, for a start, I did not ask him what the cost would be of bringing up the level of the pensions of all pensioners in Canada to that of pensions in Britain today. My question was what would be the cost of annual uprating, which is about £4 million or £4·8 million per annum. The cost of £35 million which my hon. Friend included in his reply is the cost of a full uprating. All I am asking for at this time is, as happens in every other country with which the British Government have a social security agreement, not the full uprating but simply the payment of increases as and when they become due in Britain.
Another point which my hon. Friend mentioned in his reply to one of my questions last Friday was that the cost of uprating in the first year would be £4·8 million, "rising progressively". But I question whether that figure is likely to rise markedly at all, simply because, if my hon. Friend looks at the available statistics for 1966 and 1967, which were important years for British emigration to Canada, no fewer than 74,000 Britons went to live in Canada. Such has been the change since then that in the past two years for which figures are available, 1983 and 1984, the figure of 74,000 has been reduced to only 7,000.
There has been a change in the pattern of emigration from Britain to Canada. I accept that if one did not take into account the fact that by natural attrition many of the existing British pensioners in Canada will have died, perhaps by the year 2000 the cost could be £35 million a year. But the statistics that I have relating to subsequent emigration from Britain show that the cost is unlikely ever to be one of which the British Government should not be able to shoulder with ease and great pleasure.
Finally, I would like to stress that there is no other country in the world in which Britons live in some numbers, apart from South Africa, where we do not have a social security agreement. In every country where, for one reason or another there are sizeable pockets of British people living—except South Africa for obvious reasons—there is a social security agreement that entitles those Britons to have the right to pension upratings.
I hope that we can provide for British pensioners in Canada in the same way as we have provided for them in EEC countries and in Australia, the United States of America and all other civilised countries where such pensioners live in some numbers. We should do for those pensioners in Canada what we do for others elsewhere.
I am very proud to be associated with some of the achievements of the Government. I only hope that my hon. Friend the Minister will be able to assure me that we can

show a little generousity and so recognise what is an obvious case of manifest unfairness in relation to British pensioners in Canada.

The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Major): My hon. Friend the Member for Harborough (Sir J. Farr) presented his case, as ever, with force and clarity, and I will endeavour to reply to the important points that he made.
I would first like to congratulate my hon. Friend on his constancy and his commitment upon this issue which he has pursued, as the House will know, for many years. If I may say so, I think that British pensioners in Canada are fortunate to have my hon. Friend as their advocate in this House.
The present position for expatriate United Kingdom pensioners in Canada, as my hon. Friend is well aware, is that their pensions are paid at the rate in force when the pensioner left this country or, alternatively, when he first qualified for a pension if he was in Canada at the time he reached the appropriate age. At present, pensions are not subsequently uprated; that is the substantive cause of my hon. Friend's concern.
The background to that position is fairly clear. Until July 1955, British pensions were payable outside this country only within the Commonwealth or for short periods of absence. In July 1955 the National Insurance (Residence and Persons Abroad) Amendment Regulations 1955 came into force. Those regulations made provision, for the first time, for United Kingdom pensions to be paid anywhere in the world. There was no provision for the pensions which were to be paid abroad to be uprated.
The reason for that decision was that it was considered at the time that the social security system was primarily designed for people living in the United Kingdom. As my hon. Friend will know, the national insurance fund, then as now, is run on a "pay-as-you-go" basis rather than on a strict funding basis. That means that each year we estimate expenditure and set the rate of national insurance contributions so as to produce an income which will roughly match expenditure. The estimates of expenditure allow for the fact that pensions paid overseas are in general not uprated and would clearly have to be amended were that circumstance changed.
The purpose of the review and uprating of pensions was to ensure that they retained their value in relation to the cost of living in the United Kingdom. Also, as the cost of increasing benefits falls mainly on contributors and employers in the United Kingdom, it was at that time considered unreasonable to ask them to bear the cost of increases paid to people who have voluntarily left the country, in the absence of a social security convention. My hon. Friend mentioned the convention and I will return to that point later. Successive Governments have endorsed that general policy.
At this point I should explain, for it is entirely relevant, that the United Kingdom has agreements on social security with a number of other countries and these are properly called bilateral conventions on social security. At present there are 31 such agreements. They vary quite widely in scope but broadly their main aims are to ensure that a person working abroad does not have to pay contributions for two social security schemes at the same time and that the benefits that should accrue from any contributions paid are not lost.
Some agreements allow for pensions to be uprated but about 60 per cent. of United Kingdom pensioners living abroad do not receive pension increases on an annual uprating basis. There already exists an agreement on social security between the United Kingdom and Canada which has been in force since 1959, but that is limited in scope and does not cover pension uprating. Unfortunately, in 1972, when the United Kingdom Government proposed a comprehensive agreement with Canada which would have included pension upratings, the Canadian authorities were unable to enter into negotiations. Since 1972, a situation has developed where financial constraints have prevented the United Kingdom from concluding an appropriate agreement.
In Canada, the number of people receiving United Kingdom pensions at the end of 1985 was over 56,000, rather more than my hon. Friend mentioned. The number has matured and grown a little in recent years. To bring their pensions up to the level of pensions paid in the United Kingdom would cost about £35 million a year. I shall return to that sum in a moment because my hon. Friend referred to it specifically.
To pay the future cost-of-living increases alone, ignoring past increases, would cost £4·8 million in the first year, and that cost would rise progressively. I return to the sum of £35 million, for our calculations are that the figure would rise progressively to precisely that sum of £35 million over a period of years. My hon. Friend queried whether that cost was accurate, and in the light of what he has said and his long knowledge of these matters, I shall ask to have it re-examined and re-checked to determine whether it is.
My hon. Friend will be aware—he could scarcely fail to be so—that Government spending is subject to strict constraints and that the cost of entering into a comprehensive social security convention with Canada would need to be assessed alongside the Government's priorities for improvements to our domestic social security system. The resources are not available currently to make all the desirable improvements in social security that the House would wish.
Among the points raised by the British Pensioners Association of Canada—a formidable body—is the suggestion that, because pensioners living in Canada do not use the National Health Service or the United Kingdom social services, it should be possible to offset any savings against the cost of uprating their United Kingdom pensions. I fear that it is not possible to trade that off quite so simply, even if it were possible to quantify the savings. The NHS and social services are part of the social structure that is available to residents here and they are financed on that basis. To draw an analogy, we do not give a cash benefit to those who opt for making private arrangements; nor could we do so for those who decide to live overseas.
What is the position of a British resident in Canada in relation to the Canadian social security system? Persons emigrating from the United Kingdom to Canada can receive a Canadian residence-based pension when they have completed a minimum of 10 years' residence in that country, while 40 years' residence is needed for a full Canadian pension. Those who satisfy the 10-year residence requirement may also be eligible for the means-tested guaranteed income supplement.
I am aware of the concern of the British Pensioners Association of Canada about the effect that the exchange rate can have on United Kingdom pensioners living in

Canada. The law allows for the payment of United Kingdom pensioners in sterling rates only, as it would not be fair, or practicable either, probably, to adjust the amounts of pension to take account of the innumerable fluctuations which occur in the exchange rates between sterling and other currencies. That has clearly been a circumstance over recent years and that problem will be well understood.
Pensions will continue to be paid in sterling, but am pleased to mention to my hon. Friend that we have managed to arrange improvements in the way in which pensions and other social security benefits are paid to beneficiaries living overseas. My Department has awarded a contract to the Bank of Scotland to make these payments by credit transfer. The new system of payment, when it comes into operation—I hope that it will be later this year—will be much quicker and more efficient, in our judgment, than the present method. What is more, in addition to receiving their payments earlier, pensioners will get better exchange rates and a reduction in bank charges. The new arrangements will be available to pensioners in Canada and I hope that that will be thought to be a small but worthwhile initiative.
My hon. Friend touched particularly upon the fact that officials of the DHSS and their Canadian counterparts have been working on the preparatory technical matters for a comprehensive social security convention between the two countries. I should like to assure my hon. Friend that that work is proceeding. In the light of all that I have said, that is clearly the way forward on the problem that concerns my hon. Friend.
Unfortunately, I must reassert that, until the necessary finance is available, it will not be possible to make any substantial progress on this matter. However, we judge that it is possible to continue discussions so that we can proceed as quickly as possible once we are in a position to make the money available. Although my hon. Friend will, I know, appreciate that this evening I can give no positive undertaking to provide for the uprating of United Kingdom pensions payable in Canada in the near future, I assure him that we propose to continue work on these preparatory matters and shall certainly keep the matter firmly in front of us. I know that my hon. Friend would ensure that we did so were there to be any backsliding.
I will study with care my hon. Friend's remarks this evening and will draw them to the attention of my right hon. Friend. I am most grateful to my hon. Friend for bringing this important matter once again before the House.

Mr. Hugh Brown: The Minister has not made a very convincing case. Can he tell me how many of the pensioners in Canada are in receipt of means-tested benefits? Why is Canada the only country with which it seems to be difficult to negotiate an agreement?

Mr. Major: I do not know precisely how many pensioners in Canada receive what the hon. Gentleman refers to as means-tested benefits. I can tell him that there are 56,000 pensioners in Canada. That was the figure that was mentioned some time ago.
It is not a question of there being any unique difficulties in the negotiation of a convention with Canada. There are a number of countries with which we do not have conventions that permit the uprating of pensions. Speaking from memory, I believe that this also applies to Australia


and New Zealand, in that pensions are payable there but there is no annual uprating following the conclusion of a convention. The problem exists with a number of countries.
Although we have what might be called comprehensive conventions with a large number of countries—I think that my hon. Friend the Member for Harborough mentioned the precise number—the system is not universal. In a number of countries—moreover, countries with which we have a long, historic and close relationship—that benign circumstance does not apply.
We take no pleasure from the fact that this problem exists. That is why we are keen to continue the technical preparatory discussions that are going on at the moment, so that, when we have the financial resources, we shall be able to proceed with the minimum of delay. But I fear that, unpalatable though the position clearly is to my hon. Friend, the financial constraints are genuine and have to be borne in mind. I am not in a position to go further this evening.

Question put and agreed to.

Adjourned accordingly at twenty-two minutes to Eleven o'clock.